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One of the best ways to avoid business dispute is to draft a comprehensive and well-written commercial transaction that will define all the responsibilities and rights of the involved parties.
While some states recognize oral contracts, a written version is better and easier to prove and enforce. Most jurisdictions also require people to have a written agreement if this will be used for at least a year.
To become legally enforceable, a contract should have these following entries:
• Parties
A contract has no purpose if it does not bind at least two people. Meanwhile, anyone can enter into a contract, except people who are mentally incapable, individuals with certain criminal records, illiterate, and minors.
• Consent of each party
Involved parties should mutually consent to a contract to make this valid and legally enforceable. This means that if a transaction is signed “under duress”, or one party has pressured or threatened the other person, the agreement will be considered void.
• Exchange of anything with value
The main purpose of a contract is to allow the involved parties to exchange anything with value that will give them both benefits.
However, this “object” should be legal, definite, and possible. For example, a court will not enforce a contract that has provisions that are considered unlawful such as trade of illegal drugs, smuggling, and any fraudulent activity.
• Obligations and conditions
A contract should state and define all the terms and conditions of an agreement which include obligations and duties of each party.
• Breach of contract
This is probably one of the most important entries in most business contracts as it will allow one party to know what recourse he can do in case the other person does not fulfill his promise.
For example, a seller promised that he will deliver the goods three days after the order has been made. However, the goods have not arrived within the deadline. With a provision that allows one party to back-out from an agreement if the other person did not fulfill his duties, the buyer can withdraw his order without having to worry that he will be sued with breach of contract.
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