As a business owner, you’re making contracts almost every day, whether they’re in writing or not. Most businesses would not run if it weren’t for the frequent contractual agreements they enter into. Offers are made and accepted either in writing, by verbal agreement, or by conduct. These are all legally-binding types of contract, but written ones offer the best protection should any party wish to take legal action following a breach of contract.
Contract law is complex. It is advised that all contracts are made in writing to protect business interests. Written agreements are the most likely to prevent lawsuits from arising. However, sometimes contracts are drawn up without the proper knowledge of legislation which implies terms into a contract. Both parties might be unaware of this legislation until a dispute arises.
To remove all ambiguity from your contracts and ensure their terms are clear and legal, consult with Helix Law’s contract lawyers before you set a deal into motion.
What is Contract Law in Business?
Businesses rely on making contracts. Whether they provide a service or they sell products, they are constantly making contracts with consumers. For example, when a person fills up their car at a petrol station, they’re making a contractual agreement with the station’s owner to pay in full for the fuel.
Businesses also make contracts with other businesses, such as their suppliers or their office cleaning company. Agreements are made to trade goods and services for payment.
Contract law exists to protect both businesses and consumers when contractual agreements go wrong. Perhaps a supplier doesn’t send as much product to a business as it was obliged to, or a cleaner didn’t fulfill all the agreed terms of their job.
In cases where contractual disputes escalate, contract lawyers can be enlisted to examine the terms of the contract and advise on an appropriate resolution. Sometimes contractual disputes end up in court, where one party may be ordered to either fulfill the full terms they agreed to when the contract was made or pay damages to the aggrieved party.
There are several types of contracts that are used day-to-day within business, including:
- Non-disclosure agreements – also known as NDAs or confidentiality agreements. It is recommended that you speak to a legal advisor while drafting an NDA to avoid making mistakes that could render it invalid.
- Services agreements – whereby a supplier and a customer agree to the terms of a company providing a service for the customer.
- Subcontracting agreements – if a main contractor needs help fulfilling a job, they can enlist subcontractors. First, both parties must agree to the tasks delegated to the subcontractor, how much time they have to fulfil them, and how much they will be paid. There should also be clauses detailing what should happen if there are changes made to any of these factors or the work done is defective.
As with any contract, these should be put into writing to provide proper legal protection and ensure all parties understand and agree to their obligations. To remove any possible ambiguity in your contract’s terms, consult with Helix Law’s expert contract lawyers.
Employment And Freelance Contracts
Employment contracts are offered by an employer to an employee stating the terms of their employment relationship. It usually details things like pay, working hours and holiday allowance. Most employees are legally entitled to a contract of employment, which should be issued within two months of the commencement of their employment. An ‘employment contract’ is in effect started when the employee begins work, whether they have signed a written contract or not.
Freelance contracts are issued by a freelancer to their client. A freelance contract should lay out the work that the freelancer is to fulfil for the client, when the work will be completed, how much the freelancer should receive in payment, and when they should be paid. Having a contract helps to ensure that the freelancer gets paid the full amount for their work and sets a deadline for payment.
Employers or freelancers looking for help with constructing contracts or who are facing issues with clients or employees can contact Helix Law.
Breaches Of Contract
When a contract is breached, the aggrieved party has the right to take legal action against the breaching party. They might pursue an award of damages, specific performance or cancellation of the contract.
A few ways that contracts can be breached include:
- A party failing to perform their contractual obligation within the agreed timeframe
- A party failing to perform their obligation at all
- An obligation being performed in a way that was not agreed in the contract
If you believe a party has breached the terms of a contractual agreement they made with you, you may sue them for relief. The relief you receive will depend upon many factors that will be decided by the court, tribunal, arbitrator or mediator.
Speak to Helix Law’s solicitors today if you are concerned that a contractual agreement you have made has not been upheld by another party. We can help to resolve the situation and avoid litigation or guide you through any mediation or legal proceedings and help you gain appropriate relief.
Helix Law’s experienced contract lawyers can help you understand how an effective contract is formed. We can also help you create a contract that properly addresses your intentions and requirements, and to draft terms and conditions that minimise any contract risk to you, your clients or your employees.
We can advise you on your best course of action in the event of a breached contract. We advise and represent clients faced with contractual issues concerning business, property, employment and construction, and can help you achieve the best possible resolution.
Book A Call Back
People frequently tell us that we’re approachable and offer great advice.
They also tell us most solicitors are hard to get hold of whereas we’re happy to listen. The reason for this is that we value long term relationships and we’re happy to speak with business people, to invest our time in understanding your business and whatever your concerns are. Only at that point can we understand whether we’re the right people to help you.
Frequently Asked Questions
To ascertain whether you have a case to sue a party for a breach of contract, it is advised that you consult an experienced contract lawyer. If you have broached the subject with the other parties to the contract and aren’t receiving a satisfactory response, legal advice may be your best bet.
If you think contractual obligations have been breached by another party, contact Helix Law’s contract solicitors today to find out how we can help.
Helix Law can read over your potential contracts to check for issues that could cause legal trouble down the line. Our contract lawyers can also help you create contracts from scratch to minimise risk.
Our fees are dependent on your circumstances - we calculate costs based on fixed fees, damages-based agreements, monthly fees, and no-win-no-fee structures. Learn more on our Costs page or get in touch to discuss the best price plan we can offer you.
A breach of contract occurs when a party does not comply with the terms of a legally binding contract. Contracts exist to ensure mutual benefit between parties - if one doesn’t perform their obligation, another party loses out. The innocent party has the right to compensation for their losses, usually by seeking damages.
If you have been affected by a breach of contract, contact Helix Law’s contract lawyers today to start a claim.
There are six necessary components of a valid contract. They are:
For there to be a contract, there must be an offer. One party makes an offer to another to initiate the process of entering into a contract. The offer may be verbal or written.
Another party must accept the offer to create a valid contract. They should be clear on the terms and conditions of the offer and accept all of them. If you accept some but not all of the terms of the offer this is a counteroffer. Again, acceptance of an offer or the making of a counteroffer can be verbal or written. If a party makes a counteroffer then the original offer is cancelled and cannot later be accepted unless the party that made that original offer agrees to reinstate it.
“Consideration” in contractual terms means what the accepting party does in return for the offer. Contracts require an exchange of consideration. It can be payment or the promise to perform another obligation in return. It ensures that the initiating party gets something in return for delivering their offer.
- Intention to Create Legal Relations
Both parties are clear that the contract is legally binding and that if contractual terms are not performed by either party, legal action will ensue.
Terms and regulations must be made clear and understood by both parties to the contract. Without certainty, the contract would not be valid.
All parties to a contract must have the legal capacity to enter it. For instance, people under the age of 18 in the UK have no legal capacity to enter into contracts.
A person must be 18 years of age to legally enter into a valid contract. The age of contractual capacity in the UK has been set at 18 years since 1969 when a person is said to attain “majority”. However, there are limited circumstances where those under 18 can legally enter into contracts, such as a 16-year-old entering a valid employment contract.
“Consideration” means the obligations that the parties promise to perform in return for the agreement, such as pay for a service or perform a duty.
There are many conditions that can make a contract unenforceable, such as:
- Lack of capacity: for example, if a party to a contract is a minor, if they are deemed incompetent to enter a contract (e.g. if they are mentally disabled), or if they entered into the contract under the influence of drugs or alcohol.
- Duress or undue influence: if a person was forced or threatened into entering the contract.
- Fraud or misrepresentation: a contract can be unenforceable if it is proven that a party has deceived another about the terms of the contract by telling a lie or withholding the truth, leading to a loss to the other party.
- It is illegal: a contract that involves unlawful acts is unenforceable.
- It is unenforceable under laws that protect consumers
To avoid making a mistake or misrepresenting a term in a contract, it is best to have them drawn up or checked by a lawyer. Speak with Helix Law today to ensure a contract is valid.
Oral contracts are considered just as valid as written ones as long as they contain an offer, an acceptance, and consideration. However, it can be more difficult to prove an oral contract was made in court.
There are hundreds of ways in which contractual terms can be breached, which is why it’s best to have contracts created by a lawyer to ensure they are clearly and unambiguously written. However, some of the main ways you can avoid a breach of contract include:
- Ensure that contractual terms are put into writing
- Check that all terms are understood by the other party
- Always seek consent before changing the terms of a contract
- Consult with the other party before proposing changes and consider their views
- Put all agreed changes to the contract in writing
Contact Helix Law today regarding creating or checking a proposed contract. Our solicitors are experienced in business, employment, and property contract law. Speak with one of our lawyers today to find out how we can help.