Contract Law: The Basics
Source: www.smallbusiness.findlaw.com
This section has information on the legal issues involved in contracts and agreements. To
begin, select an item from the list below or from the "Browse" box on the left.
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Contracts: Overview
o Contracts Basics
o Contracts and the Law
o Common Business Contracts
Tips for Writing Contracts:
o Contract Negotiation and Writing Tips
o Ten Tips for Making Solid Business Agreements and Contracts
o Do's and Don'ts: Contract Terms
o Commonly Confused Contract Terms
o Checklist: Contract Terms
o Lessons Learned the Hard Way: Business Contracts
o Keeping Contracts Simple and Enforceable
Breach of Contract:
o Will Your Contract be Enforced Under the Law?
o "Breach of Contract" and Lawsuits
o Top 10 Reasons to Avoid Breaching a Contract
Contracts: Frequently Asked Questions
Contracts Basics
Most businesspersons enter into contracts more frequently than they may realize. In almost
all business dealings, any time you or your company agree to take some action or make a
payment in exchange for anything of value, a legal contract has been created. For example,
most bills of sale, purchase orders, employment agreements, and other common business
transactions are legally enforceable contracts. Following is a discussion to help you
understand the basics of contracts.
What is a contract?
A contract is a legally enforceable agreement between two or more parties that creates an
obligation to do or not do particular things. The term "party" can mean an individual person,
company, or corporation. No matter who the parties are, contracts almost always contain the
following essential elements:
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Parties who are competent to enter into a contract. For example, a mentally disabled
person could not enter into a contract. Minors can enter into contracts, but can void
them in most cases before they reach majority age.
Mutual agreement by all the parties; i.e., all parties have a meeting of the minds on a
specific subject. Each party either promises to perform an act that the party is not
legally required to perform, or promises to abstain from performing an act that it is
legally entitled to perform.
Why should I use a written contract?
To be enforceable, some agreements must be in writing. The situations in which an
agreement must be in writing can differ from state to state, but usually include transfers of real
estate, sales of goods valued at over $500, and contracts that require more than a year to
perform.
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Your written agreement becomes your proof of what was agreed upon, and prevents
someone from forgetting or changing the story later. Writing the contract down also makes the
parties focus on the essential points, and come to a definite agreement.
Can and should I write my own business contracts?
Yes, you can write your own business contracts. If there is much at stake or if the matter is
complex, you may want to use a lawyer. Your best money may be spent up front in preventing
any potential legal problems, rather than battling it out in a lawsuit later on. If the amount at
stake in your business contract is moderate or the terms simple, you may use a legal form
that both sides understand.
What laws govern contracts?
Contracts are usually governed and enforced by the laws of the state where the agreement
was made. Depending upon the subject matter of the agreement (i.e. sale of goods, property
lease), a contract may be governed by one of two types of state law. The majority of contracts
(i.e. employment agreements, leases, general business agreements) are controlled by the
state's common law -- a tradition-based but constantly evolving set of laws that is mostly
judge-made, from court decisions over the years. The common law does not control contracts
that are primarily for the sale of goods, however. Such contracts are instead governed by the
Uniform Commercial Code (UCC), a standardized collection of guidelines governing the law
of commerce. Most states have adopted the UCC in whole or in part, making the UCC's
provisions part of the state's codified laws pertaining to the sale of goods.
What is "breaching" a contract?
In the business world, disputes can arise over contracts, and one party (or both) may accuse
the other of breaking his or her obligations under the agreement. In legal terms, a party's
failure to fulfill an end of the bargain under a contract is known as "breaching" the contract.
When a breach of contract happens (or at least when a breach is alleged) one or both of the
parties may wish to have the contract "enforced" on its terms, or may try to recover for any
financial harm caused by the alleged breach.
How are contracts enforced?
The most common method used to resolve business contract disputes and enforce contracts
(if informal resolution methods fail) is through lawsuits and the court system. If the amount at
issue is below a certain dollar figure (usually $3,000 to $7,500 depending on the state), the
parties may be able to use "small claims" court to resolve the issue.
Courts and formal lawsuits are not the only option for people and businesses involved in
contract disputes. The parties can agree to have a mediator review a contract dispute. The
parties are not bound by a mediator's decision, but may be convinced to avoid a costly court
battle by how the mediator rules The parties can also agree to binding arbitration of a contract
dispute. In arbitration, a neutral party listens to the arguments from both sides and issues a
decision that is binding on the parties. This is cheaper and less time-consuming than a court
battle.
When attempting to enforce a contract, an individual or business should always consider the
effect any dispute will have on any long-term business relationship between the parties
involved.
Source: Some material from business.gov
Contracts and the Law
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A business contract is one of the most common legal transactions you will be involved in
when running a business. No matter what type of business you run, having an understanding
of contract law is a key to creating sound business agreements that will be legally enforceable
in the event that a dispute arises. Following is a discussion of the law of contracts.
"Contract" Defined
A contract is a legally enforceable agreement between two or more parties that creates an
obligation to do or not do particular things. The term "party" can mean an individual person,
company, or corporation. More on creation of a contract follows below.
At its most basic level, a contract is:
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An agreement
That is legally enforceable
Laws that Govern Contracts
Contracts are usually governed and enforced by the laws in the state where the agreement
was made. Depending upon the subject matter of the agreement (i.e. sale of goods, property
lease), a contract may be governed by one of two types of state law:
The Common Law. The majority of contracts (i.e. employment agreements, leases, general
business agreements) are controlled by the state's common law -- a tradition-based but
constantly evolving set of laws that is mostly judge-made, from court decisions over the years.
The Uniform Commercial Code (UCC). The common law does not control contracts that are
primarily for the sale of goods. Contracts for the sale of goods are controlled by the Uniform
Commercial Code (UCC), a standardized collection of guidelines that govern the law of
commercial transactions. Most states have adopted the UCC in whole or in part, making the
UCC's provisions part of the state's codified laws pertaining to the sale of goods.
Creation of a Contract
In the eyes of the law, a contract arises when there is an offer, acceptance of that offer, and
sufficient "consideration" to make the contract valid:
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An offer allows the person or business to whom the offer is made to reasonably
expect that the offering party is willing to be bound by the offer on the terms
proposed. The terms of an offer must be definite and certain.
An acceptance is a clear expression of the accepting party's agreement to the terms
of the offer.
Consideration is a legal term given to the bargained-for exchange between the
parties to the contract -- something of some value passing from one party to the
other. Each party to the contract will gain some benefit from the agreement, and will
incur some obligation in exchange for that benefit.
Types of Contracts
The law recognizes contracts that arise in a number of different ways:
A bilateral contract is the type of agreement most people think of as a traditional contract -- a
mutual exchange of promises among the parties. In a bilateral contract, each party may be
considered as both making a promise, and being the beneficiary of a promise.
A unilateral contract is one in which the offer requests performance rather than a promise
from the person accepting the offer. A unilateral contract is formed when the requested act is
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complete. A classic example of a unilateral contract is a "reward" advertisement, offering
payment of money in exchange for information or the return of something of value.
An express contract is formed by explicit written or spoken language, expressing the
agreement and its terms.
An implied contract is formed by behavior of the parties that clearly shows an intent to enter
into an agreement, even if no obvious offer and/or acceptance were clearly expressed in
words or writing.
Failure to Perform Under the Contract: "Breach"
When disputes arise over contracts, one party may accuse another of failing to perform under
the terms of the agreement. Under the law, a party's failure to fulfill an end of the bargain
under a contract is known as "breaching" the contract. When a breach of contract happens (or
when a breach is alleged), one or both of the parties may wish to have the contract "enforced"
on its terms, or may try to recover for any financial harm caused by the alleged breach.
Enforcing Contracts Under the Law
If a dispute over a contract arises and informal attempts at resolution fail, the most common
method used to resolve contract disputes and enforce contracts is through lawsuits and the
court system. If the amount at issue is below a certain dollar figure (usually $3,000 to $7,500
depending on the state), the parties may be able to use "small claims" court to resolve the
issue.
Courts and formal lawsuits are not the only option for people and businesses involved in
contract disputes. The parties can agree to have a mediator review a contract dispute, or may
agree to binding arbitration of a contract dispute.
Common Business Contracts
Some of the more common types of business contracts that you may enter into are included
in the following list.
Sales-related Contracts
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Bill of Sale
Agreement for the Sale of Goods
Purchase Order
Warranty
Limited Warranty
Security Agreement
Employment-Related Contracts
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Employment Agreement
Employee Noncompete Agreement
Independent Contractor Agreement
Consulting Agreement
Distributor Agreement
Sales Representative Agreement
Confidentiality Agreement
Reciprocal Nondisclosure Agreement
Employment Separation Agreement
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Leases
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Real Property Lease
Equipment Lease
General Business Contracts
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Franchise Agreement
Advertising Agency Agreement
Indemnity Agreement
Covenant Not to Sue
Settlement Agreement
Release
Assignment of Contract
Stock Purchase Agreement
Partnership Agreement
Joint Venture Agreement
Agreement to Sell Business
Contract Negotiation and Writing Tips
Individuals and companies negotiate and enter into contracts fairly frequently in the course of
business. Some business agreements may be simple enough for the typical person to draft,
while others may require the help of a skilled contract attorney. In either case, the ideal end
result is confidence that you have negotiated the best terms for your business, and created a
well-drafted agreement that will avoid any dispute or potential litigation. Below are tips on
negotiating and writing a sound business contract.
Negotiating Tips
Certain fundamental strategies will assist you in the day-to-day negotiation that all
businesspersons perform, in contracts and other business transactions. The following are a
few suggestions to get you started on the road to effective negotiation tactics.
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You should always have clear objectives. It helps to make a list of goals before
meeting the other party.
It is important to go to a negotiation having done your research. Know relevant law,
facts, and figures.
Consider what you really need to get from the other party, and also decide in what
areas you are willing to compromise.
Build trust with the other party. Trust will aid communication.
You may want to have a first draft of an agreement written before meeting with the
other party.
Try to keep the discussion ordered when meeting with the other party. Make a
checklist of topics that should be reached during the negotiation.
Listen to the other party and their concerns.
Contract Drafting Tips
It is helpful to understand the basics of contract drafting even if you rarely draft your own
contracts. A basic understanding can add to your confidence in all types of business writing,
and will also aid when reviewing and interpreting the contracts in which you are a party.
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An effective contract should always be clear, specific, and focused.
Sentences should be short to avoid unnecessary complexity and ambiguity.
You may want to look at sample agreements prior to drafting your own.
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Make sure all party names are accurate. Include their business titles if applicable.
A contract should be consistent in its tone, grammar, word usage, and abbreviations.
Outlining the contract can aid clarity and allow for quick reference to certain clauses.
Define important terms.
Anticipate litigation by including sections regarding venue, choice of law, and attorney
fees.
All parties should sign the contract, including business titles if applicable.
Pages should be numbered. Avoid the appearance that pages could have been
added after the agreement was signed.
As with any business writing, proofread very carefully.
Do's and Don'ts: Contracts Terms
THE DOs
DO start with a generic form as a guide, and adapt it to your particular situation.
DO entitle the document "CONTRACT" so that there can be no mistake as to its intent.
DO make sure the parties are properly identified in the first paragraph, that names are spelled
correctly, and that addresses are accurate.
DO include the date in the first paragraph so that it is easy to refer back to after contract
execution, and so that the contract can later be identified by date, such as "the November 20,
2001 Contract for the Sale of Goods."
DO use common-sense headings to make it easier to find particular provisions in the contract.
DO number the paragraphs for ease of reference.
DO use plain language whenever possible.
DO define all technical terms.
DO consider the placement of punctuation marks, since even a misplaced comma can
change the meaning of a sentence.
DO carefully review the use of conjunctions, especially "and" and "or," since the word you
choose can have a dramatic impact on meaning.
DO make sure the contract addresses all possible contingencies and that nothing is left to
chance.
DO have your attorney review every contract before you sign it.
DO ask your attorney any questions you may have about the contract -- remember, there is
no such thing as a stupid question, but it can be stupid to let a question go unanswered and
pay for it later.
DO sign in blue or other colored ink to make the original easily distinguishable from
photocopies.
DO initial every page of the contract and make sure the other party does the same so that
nothing is missed.
DO include notarization if required by applicable law.
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DO retain a copy of the contract for your records.
THE DON'Ts
DON'T include legalese or archaic phrases like "the party of the first part." "heretofore," etc.
They generally add little in terms of clarity.
DON'T include overly long sentences; rather, break sentences down into easily digestible
thoughts.
DON'T be repetitive unless it is absolutely necessary. It is preferable to refer back to a
previous provision according to its number or heading rather than to repeat it verbatim.
DON'T assume the other party defines terms the way you do. If there is any doubt, include a
definition in the contract.
DON'T read the contract over hurriedly. It takes time to understand all of the possible
nuances of the language used.
DON'T accept the other party's oral explanation of a confusing term. Include everything in
writing.
DON'T start acting according to the terms of the contract until both parties have executed it.
DON'T agree to a modification of the contract without memorializing it in writing.
DON'T assume that use of a standard or form contract eliminates the need for your lawyer's
review. Even if a standard contract worked well in one instance, a change of circumstances,
date, or party can change the whole equation.
Commonly Confused Contract Terms
When drafting a contract, care must be taken to use exactly the right words to convey the
desired meaning. The following chart illustrates how easily certain words can be confused or
misused, and if you don't read over a contract very carefully, these common mistakes can be
easy to miss. This list is by no means exhaustive, but it should help alert you to some
common errors and keep you on your toes in order to catch others.
WORD: MEANING
CAN BE CONFUSED WITH: MEANING
Affect: To alter, influence, or change
Effect: A result, or to bring about change
Alternate: A substitute or second choice, or to take turns
Alternative: One choice among various options
Among: Occurring in a group of three or more
Between: Occurring in a set of two
Assure: To convince
Insure: To guard against loss
Assure: To convince
Ensure: To make certain
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Bimonthly: Every other month
Semimonthly: Twice a month
Biweekly: Every other week
Semiweekly: Twice a week
Capital: City that is the seat of local government, or relating to money, or an uppercase letter
Capitol: The building in which the legislature meets
Continual: Intermittent or repeated at intervals
Continuous: Without interruption
Discreet: Prudent or cautious
Discrete: Separate or detached
Eminent: High in rank
Imminent: About to occur
Farther: Greater distance
Further: Greater degree, time, or quantity
Fewer: A smaller number of units
Less: A smaller quantity
i.e.: That is
e.g.: For example
Imply: To suggest
Infer: To conclude
Its: Belonging to it
It's: It is
Mean: The number obtained by adding all values together and dividing by the number of
values
Median: The value that falls in the middle of all of the recorded values, with an equal number
of values above and below it
Practical: Useful in actual practice
Practicable: Capable of being put into practice
Principal: Head or chief
Principle: A basic truth or assumption
Stationary: Fixed or immovable
Stationery: Writing materials
Checklist: Contract Terms
Although all contracts can be somewhat different, there are certain contract terms that are
among the most commonly included in business contracts. Not all of these provisions will be
included in every contract, and most contracts will include additional provisions that relate
specifically to their particular subject matter. The following checklist is, however, a basic and
general guide as to what provisions it may be important to include, or at least consider, in the
business contracts that you enter into.
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Identity of the parties
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Individuals or business entities?
If businesses, what type? (partnership, corporation, etc.)
Name of person signing on behalf of the business
Signer's official title
Does he or she have authority to bind the business?
Addresses of the parties
Purpose(s) of the contract
Underlying assumptions
Contract terms
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In general
Duties of each party
Rights of each party
Relevant dates
Relevant prices or other dollar amounts
Relevant quantities
Payment terms
Lump sum, COD, installments?
Payment due dates
Taxes
Interest
Late fees
Warranties
Disclaimers
Limitations on liability
Liquidated damages
Confidentiality provision
Indemnification agreement
Default
Arbitration clause
Governing law
Venue of lawsuits involving the contract
Statement that contract constitutes entire agreement
Severability of individual provisions
Signatures of authorized signatories
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Notarization
Lessons Learned the Hard Way: Business Contracts
We've all heard the saying that "an ounce of prevention is worth a pound of cure." Those
words are particularly apt in the context of business contracts, where careful consideration at
the outset can prevent major headaches in the long run. Being sued for breach, or suing
another party on the same basis, is expensive, time-consuming, and energy-depleting. Most
contract disputes could be avoided, however, if the parties took the time to make their
intentions and expectations clear to each other from the start.
Take for example the case involving a food buyer who ordered more than 200 tons of
chicken, expecting to receive young chickens suitable for broiling and frying. When the
chicken arrived, it was actually older, stewing chicken, and the disappointed buyer sued. The
court was called upon to decide what reasonable parties would have meant by the use of the
term "chicken."
After listening to the testimony of several experts, the court concluded that the use of the
more generic reference in the contract did not entitle the buyer to a particular type or grade of
chicken. The experts had explained that people in the trade typically specify the kind of
chicken they intend to buy and sell. Accordingly, in that case, the seller won, but only after
protracted litigation. Both the buyer and the seller could have saved themselves a lot of
aggravation by being more specific in the contract.
In another case, a crop grower and a food processing company entered into a contract
whereby the food processing company agreed to harvest hundreds of acres of vegetables
grown by the crop grower, except in the case of "adverse weather conditions." The crops had
been planted at staggered intervals so that not all harvesting would have to take place at the
same time. The weather that year was unseasonably cool early in the season, but it suddenly
became warm and sunny, causing all of the crops to mature at once. The food processing
company could not harvest all of the crops simultaneously, and the grower sued for breach.
The processor argued that it was off the hook based on the "adverse weather conditions"
clause, and the court agreed. Although the weather had been what many would deem ideal,
and it was probably not what the crop grower had envisioned as "adverse weather," it was not
perfect weather for harvesters. Thus, the contract language did in fact excuse the processor's
lack of performance.
These cases illustrate the importance of clarifying contract language before signing on the
dotted line. Make sure that you and the other party agree about the meaning of any potentially
ambiguous words or phrases. Even a misplaced (or unnoticed) punctuation mark can
dramatically change the scope of your rights and obligations under a contract. Watch also for
commonly misused words. When you agree to bimonthly payments, for instance, do you
understand that you will be paid every other month? Or will you expect to be paid twice a
month -- semi-monthly?
Because so much is at stake, the safest and most prudent course of action is to have an
attorney experienced in contract law review and approve all agreements before you sign
them. It may require a little extra time and money at the outset, but those expenditures pale in
comparison to what you stand to lose in a full-blown contract dispute.
Keeping Your Contracts Simple -- and Enforceable
For most contracts, legalese is not essential or even helpful. On the contrary,
contractual agreements are best expressed in simple, everyday English.
Although lots of contracts are filled with mind-bending legal gibberish, there's no reason why
this has to be true. For most contracts, legalese is not essential or even helpful. On the
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contrary, the agreements you'll want to put into a written contract are best expressed in
simple, everyday English.
All that is necessary for most contracts to be legally valid are the following two elements:
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All parties are in agreement (after an offer has been made by one party and accepted
by the other).
Something of value has been exchanged, such as cash, services, or goods (or a
promise to exchange such an item) for something else of value.
In a few situations, a contract must also be in writing to be valid. State laws often require
written contracts for real estate transactions or agreements that will last more than one year.
You'll need to check your state's laws to determine exactly which contracts must legally be in
writing. Of course, it is wise to write out most business agreements, even if not legally
required, because oral contracts can be difficult or impossible to prove.
Let's look a bit more closely at the two elements necessary for a valid contract: agreement
between the parties and exchange of things of value.
1. Agreement Between Parties (a.k.a. Offer and Acceptance)
Although it may seem like stating the obvious, an essential element of a valid contract is that
all parties really do agree on all major issues. In real life, there are plenty of situations that
blur the line between a full agreement and a preliminary discussion about the possibility of
making an agreement. To help clarify these borderline cases, the law has developed some
rules defining when an agreement legally exists.
The most basic rule of contract law is that a legal contract exists when one party makes an
offer and the other party accepts it. For most types of contracts, this can be done either orally
or in writing.
Let's say, for instance, you're shopping around for a print shop to produce brochures for your
business. One printer says (or faxes) that he'll print 5,000 two-color flyers for $200. This
constitutes his offer. If you tell him to go ahead with the job, you've accepted his offer. In the
eyes of the law, when you tell the printer to go ahead, you create a contract, which means
you're liable for your side of the bargain (in this case, the payment of $200). But if you tell the
printer you're not sure and want to continue shopping around (or don't even respond, for that
matter), you clearly haven't accepted the offer, and no agreement has been reached. Or if
you say the offer sounds great, except that you want the printer to use three colors instead of
two, no contract has been made, since you have not accepted all of the important terms of the
offer. You have actually changed one term of the offer. (Depending on your wording, you
have probably made a counteroffer, which is discussed below.)
In day-to-day business, the seemingly simple steps of offer and acceptance can become quite
convoluted. For instance, sometimes when you make an offer it isn't quickly and
unequivocally accepted; the other party may want to think about it for a while or try to get a
better deal. And before the other party accepts your offer, you might change your mind and
want to withdraw or amend your offer. Delaying acceptance of an offer and revoking an offer,
as well as making a counteroffer, are common situations in business transactions that often
lead to confusion and conflict. To minimize the potential for a dispute, here are some general
rules you should understand and follow.
How Long an Offer Stays Open
Unless an offer includes a stated expiration date, it remains open for a "reasonable" time.
What's reasonable, of course, is open to interpretation and will vary depending on the type of
business and the particular fact situation.
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To leave no room for doubt as to when the other party must make a decision, the best way to
make an offer is to include an expiration date.
If you want to accept someone else's offer, the best approach is to do it as soon as possible,
while there's no doubt that the offer is still open. Keep in mind that until you accept, the
person or company who made the offer -- called the offeror -- may revoke the offer.
Revoking an Offer
Whoever makes an offer can revoke it as long as it hasn't yet been accepted. This means if
you make an offer and the other party wants some time to think it through, or makes a
counteroffer with changed terms, you can revoke your original offer. Once the other party
accepts, however, you'll have a binding agreement. Revocation must happen before
acceptance.
An exception to this rule occurs if the parties agree that the offer will remain open for a stated
period of time.
Offers With Expiration Dates
An offer with an expiration date is called an option, and it usually doesn't come for free. Say
someone offers to sell you a forklift for $10,000, and you want to think the offer over without
worrying that the seller will withdraw the offer or sell to someone else. You and the seller
could agree that the offer will stay open for a certain period of time, say thirty days. Often,
however, the seller will ask you to pay for this 30-day option -- which is understandable, since
during the 30-day option period the seller can't sell to anyone else.
Payment or no payment, when an option agreement exists, the offeror cannot revoke the offer
until the time period ends.
Counteroffers
Often, when an offer is made, the response will be to start bargaining. Of course, haggling
over price is the most common type of negotiating that occurs in business situations. When
one party responds to an offer by proposing something different, this proposal is called a
"counteroffer." When a counteroffer is made, the legal responsibility to accept, decline or
make another counteroffer shifts to the original offeror.
For instance, suppose your printer (here, the original offeror) offers to print 5,000 brochures
for $300, and you respond by saying you'll pay $250 for the job. You have not accepted his
offer (no contract has been formed) but instead have made a counteroffer. If your printer then
agrees to do the job exactly as you have specified, for $250, he's accepted your counteroffer,
and a legal agreement has been reached.
While it's true that a contract is formed only if the accepting party agrees to all substantial
terms of an offer, this doesn't mean you can rely on inconsequential differences to void a
contract later. For example, if you offer to buy 100 chicken sandwiches on one-inch-thick
sourdough bread, there is no contract if the other party replies she will provide 100 emu filets
on rye bread. But if she agrees to provide the chicken sandwiches on one-inch-thick
sourdough bread, a valid contract exists, and you can't later refuse to pay if the bread turns
out to be a hair thicker or thinner than one inch.
2. Exchange of Things of Value
In addition to both parties' agreement to the terms, a contract isn't valid unless both parties
exchange something of value, in anticipation of the completion of the contract. The "thing of
value" being exchanged -- which every law student who ever lived has been taught to call
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"consideration" -- is most often a promise to do something in the future, such as a promise to
perform a certain job or a promise to pay a fee for a job. For instance, let's return to the
example of the print job. Once you and the printer agree on terms, there is an exchange of
things of value (consideration): the printer has promised to print the 5,000 brochures and you
have promised to pay $250 for them.
The main importance of requiring things of value to be exchanged is to differentiate a contract
from a generous statement or a one-sided promise, neither of which are enforceable by law. If
a friend offers you a gift without asking anything in return -- for instance, such as offering to
stop by and help you move a pile of rocks -- the arrangement wouldn't count as a contract
because you didn't give or promise your friend anything of value. If your friend never followed
through with her gift, you would not be able to enforce her promise. However, if you promise
your friend you'll help her weed her vegetable garden on Sunday, in exchange for her helping
you move rocks on Saturday, a contract exists.
Although the exchange-of-value requirement is met in most business transactions by an
exchange of promises ("I'll promise to pay money if you promise to paint my building next
month"), actually doing the work can also satisfy the rule. If, for instance, you leave your
printer a voice-mail message that you'll pay an extra $100 if your brochures are cut and
stapled when you pick them up, the printer can create a binding contract by actually doing the
cutting and stapling. And once he does so, you can't weasel out of the deal by claiming you
changed your mind.
Will Your Contract Be Enforced Under the Law?
If you are involved in a business agreement, one of the first things to determine is whether the
promise or agreement at issue will be considered an enforceable contract under the law.
While contracts usually involve promises to do something (or refrain from doing something),
not all promises are contracts. How does the law determine which promises are enforceable
contracts and which are not?
Is the Agreement a Contract?
Courts look at a number of factors to determine whether an agreement should be enforced.
The court must initially determine whether the agreement constitutes a contract or not. In
order for an agreement to be considered a valid contract, it must satisfy certain requirements.
One party must make an offer and the other party must accept it. There must be a bargained
for exchange of promises, meaning that something of value must be given in return for a
promise. In addition, the terms of a contract must be sufficiently definite for a court to enforce
them.
Enforcement and Contract Defenses
If a court determines that a contract exists, it next must decide whether that contract should
be enforced. There are a number of reasons why a court might not enforce a contract. These
are called defenses to the contract. Contract defenses are designed to protect people from
unfairness in the bargaining process, or in the substance of the contract itself. If there is a
valid defense to a contract, the contract may be voidable, meaning the party to the contract
who was the victim of the unfairness may be able to cancel or revoke the contract. In some
instances, the unfairness is so extreme that the contract is considered void, in other words, a
court will declare that no contract was ever formed. What are some of the reasons a court
might refuse to enforce a contract?
Contract Defenses: Capacity to Contract
In order to be bound by a contract, a person must have the legal ability to form a contract in
the first place. This legal ability is called capacity to contract. A person who is unable, due to
age or mental impairment, to understand what she is doing when she signs a contract may
13
lack capacity to contract. For example, a person under legal guardianship due to a mental
defect completely lacks the capacity to contract. Any contract signed by that person is void.
In other situations, a person may not completely lack the capacity to contract. The contract
would then be voidable at the option of the party claiming incapacity, if he or she is able to
prove the incapacity.
A minor generally cannot form an enforceable contract. A contract entered into by a minor
may be canceled by the minor or by his or her guardian. After reaching the age of majority
(18 in most states), a person still has a reasonable period of time to cancel a contract entered
into as a minor. If, however, he or she does not cancel the contract within a reasonable
period of time, the contract will be considered ratified, making it binding and enforceable.
If a person signs a contract while drunk or under the influence of drugs, can that contract be
enforced? Courts are usually not very sympathetic to people who claim they were intoxicated
when they signed a contract. Generally a court will only allow the contract to be avoided if the
other party to the contract knew about the intoxication and took advantage of the intoxicated
person, or if the person was somehow involuntarily intoxicated (e.g. someone spiked the
punch).
Contract Defenses: Undue Influence, Duress, Misrepresentation
Coercion, threats, false statements, or improper persuasion by one party to a contract can
void the contract. The defenses of duress, misrepresentation, and undue influence address
these situations:
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To claim the defense of duress, a party must show that assent or agreement to the
contract was induced by a serious threat of unlawful or wrongful action, and that she
had no reasonable alternative but to agree to the contract. Blackmail is an example
of duress.
Undue influence is a type of improper persuasion that causes a person to enter an
unfair transaction. Undue influence is often defined as unfair persuasion by a person
who, because of his or her relation to the victim, is justifiably assumed by the victim to
be one who will not act in a manner that is inconsistent with the victim's welfare.
The defense of misrepresentation focuses on dishonesty in bargaining. A
misrepresentation may be: 1) a false statement of fact, 2) the deliberate withholding
of information which a party has a duty to disclose, or 3) an action that conceals a
fact (for example, painting over water damage when selling a house).
Contract Defenses: Unconscionability
The unconscionability defense is concerned with the fairness of both the process of contract
formation and the substantive terms of the contract. When the terms of a contract are
oppressive or when the bargaining process or resulting terms shock the conscience of the
court, the court may strike down the contract as unconscionable.
The unconscionability defense applies to a wide variety of types of conduct, so a court will
look at a number of factors in determining if a contract is unconscionable. If there is a gross
inequality of bargaining power, so the weaker party to the contract has no meaningful choice
as to the terms, and the resulting contract is unreasonably favorable to the stronger party,
there may be a valid claim of unconscionability. A court will also look at whether one party is
uneducated or illiterate, whether that party had the opportunity to ask questions or consult an
attorney, and whether the price of the goods or services under the contract is excessive.
Contract Defenses: Public Policy and Illegality
Rather than protecting the parties to a contract as other contract defenses do, the
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defenses of illegality and violation of public policy seek to protect the public welfare and the
integrity of the courts by refusing to enforce certain types of contracts. Contracts to engage in
illegal or immoral conduct would not be enforced by the courts.
Contract Defenses: Mistake
A contract can be canceled on the grounds of mutual mistake of fact. In order to cancel a
contract for mistake, both parties must have made a mistake as to a basic assumption on
which the contract was based, and the mistake must have a material effect upon the agreed
exchange. The mistake must relate to facts existing at the time the contract is made. In
addition, the party seeking to avoid the contract must not have contractually assumed the risk
of mistake. Parties sometimes attempt to claim mistake as a defense to a contract when they
have failed to read the contract and later become aware of terms they dislike. Failure to read
the contract is not a defense. A person who signs a contract is presumed to know what it
says, and is bound to the terms she would have known about, had she read the contract.
"Breach of Contract" and Lawsuits
In a perfect business world, agreements would be entered into, both sides would benefit and
be pleased with the outcome, and no disputes would arise. But in the real business world,
delays happen, financial problems can crop up, and other unexpected events can occur to
hinder or even prevent a successful contract from being carried out. Following is a discussion
of the legal concept of "breach of contract," and your options should such a breach occur.
What is a "Breach of Contract"?
A business contract creates certain obligations that are to be fulfilled by the people or
companies who entered into the agreement. In the eyes of the law, a party's failure to fulfill
an end of the bargain under a contract is known as a "breach" of the contract. Depending on
the specifics of the contract, a breach can occur when a party fails to perform on time, does
not perform in accordance with the terms of the agreement, or does not perform at all.
Accordingly, a breach of contract will usually be categorized as either "material" or
"immaterial" for purposes of determining the appropriate legal solution or "remedy" for the
breach. [More on legal remedies for breach of contract can be found below.]
To illustrate how a breach of contract might happen in the real world, assume that R. Runner
contracts with Acme Anvils for the purchase of some of its products, for delivery by the
following Monday evening. If Acme delivers the Anvils to Runner on the following Tuesday
morning, such a breach of the contract would likely be deemed immaterial, and R. Runner
would likely not be entitled to money damages (unless he could show that he was somehow
damaged by the late delivery). However, assume now that the contract stated clearly and
explicitly that "time is of the essence" and the anvils MUST be delivered on Monday. If Acme
delivers after Monday, its breach of contract would likely be deemed "material," and R.
Runner's damages would be presumed, making Acme's liability for the breach more severe,
and likely relieving Runner of the duty to pay for the anvils under the contract.
What Happens After a Contract is Breached?
When a breach of contract happens (or when a breach is alleged), one or both of the parties
may wish to have the contract enforced on its terms, or may try to recover for any financial
harm caused by the alleged breach.
If a dispute over a contract arises and informal attempts at resolution fail, the most common
method used to resolve contract disputes and enforce contracts is through lawsuits and the
court system. If the amount at issue is below a certain dollar figure (usually $3,000 to $7,500
depending on the state), the parties may be able to use "small claims" court to resolve the
issue.
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Courts and formal lawsuits are not the only option for people and businesses involved in
contract disputes. The parties can agree to have a mediator review a contract dispute, or may
agree to binding arbitration of a contract dispute. These out-of-court options are two methods
of "alternative dispute resolution."
No matter what avenue is chosen to remedy a breach of contract, the non-breaching party will
most likely be entitled to some kind of remedy under the law.
Remedies for a Breach of Contract
When an individual or business breaches a contract, the other party to the agreement is
entitled to relief (or a "remedy") under the law. The main remedies for a breach of contract are
(1) damages, (2) specific performance, (3) or cancellation and restitution.
Damages
The remedy that is most often used for a breach of contract is the remedy of damages -payment in one form or another, made by the breaching party to the non-breaching party.
There are many kinds of damages, and generally speaking damages may be very specific to
the kind of breach that has occurred. Following are some guidelines on damages.
Compensatory damages aim to put the non-breaching party in the position that they had been
if the breach had not occurred.
Punitive damages are payments that the breaching party must make, above and beyond the
point that would fully compensate the non-breaching party. Punitive damages are meant to
punish a wrongful party for particularly wrongful acts, and are rarely awarded in the business
contracts setting.
Nominal damages are token damages awarded when a breach occurred, but no actual
money loss to the non-breaching party was proven.
Liquidated damages are specific damages that were previously identified by the parties in the
contract itself, in the event that the contract is breached. Liquidated damages should be a
reasonable estimate of actual damages that might result from a breach.
Specific Performance. If damages are inadequate as a legal remedy, the non-breaching party
may seek an alternative remedy called specific performance. Specific performance is best
described as the breaching party's court-ordered performance of duty under the contract.
Specific performance may be used as a remedy for breach of contract if the subject matter of
the agreement is rare or unique, and damages would not suffice to place the non-breaching
party in as good a position as they would have been had the breach not occurred.
Cancellation and Restitution. A non-breaching party may cancel the contract and sue for
restitution if the non-breaching party has given a benefit to the breaching party. "Restitution"
as a contract remedy means that the non-breaching party is put back in the position it was in
prior to the breach, while "cancellation" of the contract voids the contract and relieves all
parties of any obligation under the agreement.
Top 10 Reasons to Avoid Breaching a Contract
10. YOUR BUSINESS REPUTATION. You could damage your reputation in the business
community.
9. YOUR BUSINESS RELATIONSHIPS. You could sever your business relationship with the
other party.
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8. LAWSUITS. You could be sued.
7. TIME AWAY FROM YOUR BUSINESS. If sued, you could be forced to spend valuable
time away from your business in order to respond to discovery requests, attend depositions,
and litigate the matter in court.
6. LEGAL FEES. You could incur significant legal fees.
5. SPECIFIC PERFORMANCE. Depending on the nature of the contract, you could be
ordered by the court to perform your obligations under the contract.
4. CONTEMPT. If you don't obey the court's order, you could be held in contempt, fined,
and/or imprisoned.
3. COMPENSATORY AND CONSEQUENTIAL DAMAGES. You could be forced to pay
money damages to the nonbreaching party, in an amount that puts that party in as good a
position as it would have been in were it not for the breach.
2. PUNITIVE DAMAGES. You could be ordered to pay punitive damages, which are not
limited by the amount of the other party's losses and can be very significant.
1. YOU LOSE ALL THE WAY AROUND. You could end up spending much more time,
money, and mental and physical energy resolving the breach than you would have spent
performing your obligations under the contract.
Forms & Contracts: Frequently Asked Questions
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When will a promise or statement be considered a binding contract?
What contracts are required to be in writing?
Must a mortgage be put in writing?
Do all construction contracts need to be in writing?
What is "consideration" and how much is required?
Do construction contracts require "consideration"?
What is "specific performance" as a legal remedy?
Is the bidding process the same for private and government construction contracts?
How can an international contract be illegal?
When Will a Promise or Statement Be Considered a Binding Contract?
Are there any instances in which a contract could exist even though the parties did not
complete the deal?
If one party makes a statement or a promise that causes another party to rely on that
statement in such a way that he or she is financially injured by that reliance, then a court will
enforce the statement or promise as if it was a completed contract. The court does not need
to find an agreement or consideration in order to enforce the promise like a contract.
The idea of giving a remedy against a person who has broken his or her promise appeals to
most people. However, the "detrimental reliance" of the promisee (the person to whom the
promise is made) on the promise must be reasonable and foreseeable by the promisor (the
person who made the promise) at the time of his or her statement. If the promisee took action
that the promisor could not have anticipated, the promisor is not required to live up to the
promise.
Example: John tells Doris he will pay her $3,000 to take care of his children for the summer.
Doris cancels her less lucrative summer employment in favor of John's offer, but at the last
minute John takes in a foreign exchange student who will do the work for free. Doris may be
17
able to receive damages from John for the lost earnings she suffered by relying on his
promise.
But, if John tells Doris he will pay her $3,000 to take care of his children for the summer and
Doris drops her health insurance coverage because she assumes John will cover her, her
assumption is not based on a promise made by John. Therefore, Doris can not get damages
from John for her increased medical expenses.
What Contracts are Required to Be in Writing?
Most contracts can be either written or oral, but some agreements must be in writing in order
to be binding. The following types of contracts need to be executed in writing:
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real estate sales;
agreements to pay someone else's debts;
contracts that take longer than one year to complete;
real estate leases for longer than one year;
contracts for over a certain amount of money (depending on the state);
contracts that will last longer than the life of the party performing the contract; and
a transfer of property at the death of the party performing the contract.
An English law from 1677, the "Statute of Frauds," provides the basis for current written
contract requirements. The goal of written contract rules remains the same as ever-to avoid
fraud by requiring written proof of the underlying agreement. This legal goal makes sense as
a practical objective as well.
Although other types of contracts may be oral, it is advisable to "get it in writing" to insure both
parties understand their obligations. If court enforcement is required, a written contract shows
the parties' obligations and avoids a "he said, she said" dispute. It is easier to check with an
attorney prior to signing to see whether a contract is valid than it is to enforce a poorly-drafted
agreement after problems arise.
Must a Mortgage Be in Writing?
Although many contracts are enforceable whether written or oral, contracts that involve a
transfer of real estate are deemed important enough that they are required, under the Statute
of Frauds, to be in writing to be enforceable. The Statute of Frauds originated in England in
1677, and has been subsequently adopted in some variation in all states. As relates to
mortgages, the purpose of the Statute of Frauds is to prevent a creditor from fraudulently
contending that a debtor granted it an unwritten mortgage when in reality none existed.
There is an exception to the Statute of Frauds, called the part performance doctrine, under
which an unwritten mortgage is deemed to arise by operation of law or is deemed enforceable
even though unwritten. A mortgage will arise under this doctrine only when money is lent for
the purchase of the specific real estate on which a mortgage is to be granted. If the money is
lent and the borrower does not follow through with a mortgage as promised, an equitable
mortgage can arise in favor of the lender by operation of law.
However, simply lending money does not constitute sufficient part performance to take an
unwritten security arrangement out of the Statute of Frauds. The money has to be lent
specifically for the purchase of the real estate on which the mortgage is to be granted. In
cases where the loan proceeds are to be used for purposes other than the purchase of the
real estate at issue, the lender will have to look to assets other than the real estate to satisfy a
judgment on the defaulted loan.
Even where the part performance doctrine requirements for imposition of an equitable
mortgage are met, it is highly advisable to get the mortgage in writing. First, oral testimony as
18
to the mortgage agreement is subject to clouded recollections and intentional fabrication. On
the other hand, a written mortgage speaks for itself and should avoid a credibility contest in
court. Also, by definition, an unwritten mortgage is unrecordable. Therefore, other parties can
record liens and mortgages on the real estate at issue subsequent to the initial loan. This can
result in the holder of the unwritten mortgage losing the repayment priority to which he or she
is entitled by virtue of the earlier loan.
It is clearly in the best interests of the lender in any situation to get the mortgage in writing. In
many states there are standard "boilerplate" forms that can be used. It is also crucial that the
mortgage actually be recorded, rather than placed in a file folder for future recordation if
necessary.
Do All Construction Contracts Have to Be in Writing?
Not necessarily. All states have a law (generally known as the "statute of frauds") that
requires certain types of contracts to be in writing. As the name suggests, the statute is
designed to prevent fraudulent claims, especially in the case of large contracts.
If contracts listed in the statute of frauds are not in writing, they cannot be enforced.
Construction contracts sometimes fall within the terms of a state's statute of frauds and
therefore must be in writing.
For example, in Florida, the following types of contracts that might involve construction
projects must be in writing:
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credit agreements (i.e. construction loan financing);
contracts that cannot be performed within one year (major construction projects may
fit this bill);
contracts for the sale of goods over $500 (any contract involving expensive
construction materials); and
contracts for the sale of real property (contracts involving the sale of improved real
estate).
In addition, written contracts for construction work frequently include clauses requiring that
any modification of the original written agreement must also be in writing and stating that the
written contract constitutes the entire agreement of the parties. Courts will generally uphold
and enforce these clauses to defeat an owner or contractor's claims that there was a separate
oral agreement that changed the terms of the written agreement.
What is "Consideration" and How Much is Required?
Generally, the courts will not reform a contract because one party made a bad bargain.
Consideration is the value bargained for by the parties, and most decisions indicate there is
no reason to inquire into a party's motivation for giving another party an incredible deal. In a
famous legal quote, a single peppercorn was considered adequate consideration.
Having said that, consideration must meet other requirements. The consideration must be an
exchange for the bargain in question; past consideration is no good.
Example: Suppose XYZ Corp. employs Dave under a contract for one year for $100,000. Six
months later the president notes that Dave does not seem happy in his job. The president
offers Dave $20,000 more to stay for the full term of the contract. At the end of the year, Dave
asks for the extra $20,000. There is no enforceable contract for the extra incentive pay. Under
the original contract, Dave was already obligated to work for XYZ Corp. for a full year. The
extra pay is not supported by new consideration; Dave is not giving anything that he did not
previously agree to.
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But, if the $20,000 was offered to Dave to take on extra responsibilities or to work Friday
nights, and he did, there would be additional consideration that would support the change to
the contract.
Do Construction Contracts Require Consideration?
Like all contracts, construction contracts require "consideration" in order to be enforceable.
Consideration can consist of money, as well as agreeing to do something that you don't have
to do.
Example: I agree to pay you $2,300 to paint my house. My agreement to pay you $2,300 is
the "consideration" (what I give up to get what you promised) that makes this contract
enforceable.
A promise that is made without the expectation of anything in return is known as a gratuitous
promise. Such a promise is not generally enforceable because there is no consideration.
Example: I promise to seal your driveway the next time I seal mine; you don't agree to do
anything for me in return. My promise to seal your driveway is unenforceable because you
haven't provided me any consideration.
In the construction context, consideration may be an issue when a prime contractor is forced
by a supplier to pay more than the existing contract amount with the supplier for a given item.
Example: A general contractor agreed to buy a trash disposal system from a subcontractor.
Relying on the subcontractor's bid, the general contractor was awarded the contract. After the
award, the subcontractor demanded a higher price, which the general contractor agreed to
pay. The court found that the agreement to pay the higher amount was unenforceable
because there was no consideration.
What is "Specific Performance" as a Legal Remedy?
"Specific performance" is a specialized remedy used by courts when no other remedy (such
as money) will adequately compensate the other party. If a legal remedy will put the injured
party in the position he or she would have enjoyed had the contract been fully performed,
then the court will use that option instead. The most common reason courts grant specific
performance is that the subject of the contract is unique. When a contract is for the sale of a
unique property, mere money damages will not remedy the purchaser's situation.
Example: Rina offers to buy Beth's house and Beth accepts, but later decides to keep the
property. Real estate is considered to be unique. Since there is no other piece of property or
house exactly like Beth's, Rina may be entitled to specific performance on the contract. Beth
would be compelled to go through with the sale.
Courts will enforce specific performance only if the underlying contract was fair and equitable.
Other commodities that courts have found to support specific performance include works of
art, custom-made products, and goods in short supply.
Is the Bidding Process the Same for Private and Government Contracts?
No. Construction contracts may fall into one of two basic categories:
(1) public contracts, where the party requesting bids is a government agency; and
(2) private contracts, where none of the parties to the bidding process is a government
agency.
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The bidding process in connection with public contracts is generally very formal, with a raft of
existing rules and regulations that must be strictly followed in order to emerge with the
winning bid.
In connection with private contracts, the bidding process is less formal and not generally
constrained by detailed government-imposed rules and regulations. In the private sector, the
owner or prime contractor requesting bids has wide latitude in setting its own rules for
soliciting bids, and in selecting among the various bids submitted. However, this latitude in the
private sector is not completely unbounded. In connection with major projects, it is wise to
have a construction lawyer review bid solicitation documents for compliance with state and
local laws and customs.
How Can an International Contract Be Illegal?
Courts will not enforce contracts that are illegal. An illegal contract either specifies prohibited
goods or services, or requires illegal activity in order to fully perform its terms. Since
international business by its nature involves multiple layers of law, contracts that would be
perfectly legal in one country may be illegal in another and unenforceable in that country's
courts.
Example: Gus and Marshall enter into a contract for the sale of hemp. While this contract is
perfectly legal in countries that allow the cultivation and sale of hemp, the hemp would be an
illegal subject of the contract if Gus took delivery of the hemp in a country that outlawed the
product or tried to sue Marshall for breach of contract in such a country.
Illegality of performance can also negate a contract. If a contract for the sale of goods
originating in Ireland requires that the shipment include a NAFTA certificate of origin, at least
that clause of the contract is illegal and void. The goods are Irish, and cannot legally receive a
NAFTA certificate of origin.
Intervening illegality can also affect contract validity. If a contract is legal in its terms when
made, but subsequent laws outlaw performance or subject matter, the parties may have to
abandon the contract. If possible, the illegal provisions can be severed from the agreement
and performance can go forward. Otherwise, the parties are released from the contract. Both
sides should check with their attorneys to make certain their obligations under the agreement
are finished.
The variety of laws that may apply to international contracts heighten the possibility of
illegality. Competent legal advice regarding the status of a contract's terms will help
businesses avoid these difficulties.
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Forms & Contracts: A to Z
Note: This A to Z list doesn't contain all the forms & contracts available on FindLaw.
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To view our collection of real-life business contracts, click here.
To view our collection of court forms, click here.
A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W-X-Y-Z
Accident/Work Injury Report
Action of the Incorporator of XYZ, Inc
Affidavit for Judgment by Confession
Alternative Performance Review
Anticipated Job Requirements Summary
Applicant Consent Form to Investigate and Disclose Data
Application for Authority of XYZ, Inc
Assignment and Bill of Sale
Attendance Log
Authorization for Payroll or Other Deductions Form
Before Beginning the Valuation Process
top
Before You Register Your Mark
Bill of Sale
Billing Dispute Letter
Broker Listing Agreement
Business Deductions Checklist
Business Voucher Receipts Form
By-Laws of XYZ, Inc
Certificate of Incorporation of XYZ, Inc
top
Choosing a Business Location Checklist
Choosing a Domain Name Checklist
Choosing a Facility Checklist
Clerical Appraisal
Code of Ethics Policy Statement
Collection of Accounts Checklist
Comparison Form
Completing an Asset Sale
Confidential Business Purchase Information Questionnaire
Confidential Business Start-Up Information Questionnaire
Confidential Settlement Agreement, Mutual Release, and Covenant Not to Sue
Confidentiality and Non-Competition Agreement
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Confirmation of At-Will Employment Form
Confirmation of Job Offer Letter
Consent to Medical Examination
Consulting Agreement (used with Stock Purchase Agreement
Consulting Agreement
Contract Execution Checklist
Contract Terms Checklist
Cover Letter and Release
Debt Collection Documents
top
Debts to Pay First Checklist
Determine Independent Contractor vs. Employee Status Checklist
Determine Overtime Liability under the Fair Labor Standards Act Checklist
Direct Deposit Consent Form
Disclosure and the Internet Checklist
Distribution and License Agreement
Document Your Invention Checklist
Documents to Bring to Your Attorney
Documents to Show Your Bankruptcy Attorney - Checklist
Drugs and Alcohol in the Workplace Checklist
Due Diligence Checklist - Purchasing a Business
Due Diligence Checklist - Being Acquired
EEO Compliance Statement and Plan
top
Employee Referral Policy and Award
Employee Status or Fact Change Form
Employee Termination Action Checklist
Employment Agreement
Employment Agreement When Hiring Outside Consultants and Independent Contractors
Employment Agreement—Alternative Long Version
Employment Agreement—Letter Version
Employment Agreement—Long Version
Employment Agreement—Short Version
Employment Application
Employment Negotiating Checklist
Establishing a Web Site Checklist
Estimate of Start-Up Costs
Exit Interview Form
Expense Report
Federal Consumer Credit Laws Checklist
top
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Final Disciplinary Warning
Final Supervisor's Approval for Termination Checklist
Financial Disclosure Form
Franchise Agreement Questionnaire
General Release—Version One
top
General Release—Version Two
Hiring Concerns Checklist
top
Hiring Results Summary Form
Immigration Control & Reform Act List of Acceptable Documents
top
Independent Sales Representative Agreement
Independent Sales Representative Agreement, Short Version
Intake Form - Financing a Business
Intake Questionnaire - Adversary Bankruptcy Proceeding
Intake Questionnaire - Bankruptcy Lists
Interrogation Confirmation and Release Form
Job Applicant Summary Review Forms
top
Job Elimination Notification
Job Hiring Progress Summary
Job Log
Judgment Pursuant To Affidavit for Judgment by Confession
Leave of Absence Letter
top
Leave of Absence Request Form
Legal and Illegal Hiring Questions Checklist
Lie Detector Disclaimer and Release Form
Loan Package Information and Documents Checklist
Making an Insurance Claim Checklist
top
Management, Administrative and Technical Services Agreement
Marketing Strategy Questionnaire
Merging with Another Business - Questions to Ask Prospective Intermediaries
Minimize Business Risks and Losses Checklist
Minimize Workplace Accidents Checklist
Model Disciplinary Warning
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Negotiable Promissory Note
top
New Hiring Job Appraisal Summary
Non-Negotiable Demand Promissory Note
Non-Solicitation Agreement
Notice and Articles of Dissolution
Notice of Termination
Numerical Employee Evaluation Form
Objective Employee Improvement Evaluation
top
On-the-Job Policies to Follow Checklist
Operating Budget
Option and Purchase Agreement
Optional Reference Inquiry Form
Orientation Period Employee Performance Review
Partnership Agreement
top
Performance Appraisal
Personal Guaranty
Personal Information Questionnaire - Hiring a Lawyer
Personnel Action Form
Planning an Effective Annual Meeting Checklist
Pre-Hiring Concerns Checklist
Preliminary Payment Calculation Sheet
Pre-Termination Consideration Checklist
Purchase Agreement
Reading a Balance Sheet
top
Receipt of Employee Handbook Form
Receipt of Idea
Reducing Lawsuit Exposure: Eleven Things Your Company Should Know
Reference Check Form
Rejection Letter from Unsolicited Resume
Rejection Letter to Job Applicant
Release and Disclaimer from Drug Testing
Representations and Warranties
Request to Review Employee Records Form
Salary Recommendation Form
top
Sales Employee Agreement—Letter Version
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Sales Employee Agreement—Long Version
Sales Employee Agreement—Short Version
Sales Employment Checklist
Sales Rep Protection Statutes
Security Investigation Consent and Release, Version One
Security Investigation Consent and Release, Version Two
Self Performance Review Evaluation Form
Separation Agreement and Release
Separation Agreement and Release
Settlement Agreement and Mutual Release
Sexual Harassment Investigations Checklist
Shareholder Agreement
Shareholder Agreement - Version Two
Short Form Job Description
Software License Agreement Provisions
Standard Employment Agreement
Statement on Trade Secrets
Stock Purchase Agreement
Telephone Reference Inquiry Form
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Termination Log Summary
Time Report
Trade Secret Concerns Checklist
Trademark, Trade Name, or Service Mark Search Questionnaire
Transfer/Promotion Log
User-Friendly Annual Report Questionnaire
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Vacation Request Form
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Voluntary Resignation by Employee Form
Written Consent of the Board of Directors of XYZ, Inc
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Source: www.smallbusiness.findlaw.com
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