FAQs By A Louisville Contract Lawyer
What Do Contracts Contain?
Traditionally, contracts contain three essential elements:
- An offer;
- Acceptance to the offer; and
- Consideration (something of value like money).
Generally, contracts should contain:
- Names of the contracting parties;
- Date for which the contract begins, terminates or conditions for renewal;
- Detail of each party’s duties and responsibilities;
- Signatures of the contracting parties.
Terms and conditions such as the following may also be included:
- Penalties and/or remedies for breach (violation) of contract;
- Exceptions to breach of contracts;
- State law which the contract is subjected to;
- What to do if a contract dispute arises; and/or,
- Saving grace clause that prevents the entire contract from being void if any clause, terms or conditions within the contract is found to be illegal.
Do Contracts Need To Be In Writing?
Contracts may be verbal, but pursuant to Kentucky’s Statue of Frauds, certain contracts are required to be in writing, such as, relevant to businesses:
- Any agreement to grant, extend, or renew credit, loan money, or make any financial accommodation to establish or assist a business or existing business;
- Sale of real estate;
- Leasing real estate for more than one year; and,
- Any agreement, by its terms, which cannot be performed within one year.
Can Contracts Be Voided?
There are circumstances when contracts are voided or are voidable. Voided contracts are invalid, do not exist and cannot be upheld.
Contracts are voided if they are invalid from the start because of some aspect of the contract renders it unenforceable or illegal. A contract is void if it:
- Involves an illegal activity
- Is structured in such a way that it cannot be performed.
A voidable contract is an agreement entered into by two or more parties that can be declared invalid by one of the parties for a legal reason. Thus, at least one of the parties has the right to cancel or affirm the contract without penalty. If that party affirms the contract, the contract becomes valid and he or she loses the right to void the contract.
Contracts are voidable if one or more of the parties:
- Is a minor (under 18 years old);
- Lacks the appropriate mental state of mind;
- Lacks the capacity to enter into a contract;
- Enters into the contract under duress (threat of violence or intimidation to do something) or undue influence (having power over the weaker party).
- Commits fraud, misrepresentation or mistake in preparation of the contract;
- Is a fiduciary and abuses his or her fiduciary duties/power. A fiduciary is someone who accepts the responsibility of taking care of the property or needs of another person to the benefit of that person.
Do I Need an Attorney?
Unless you have a lot of contract-drafting experience, having someone with knowledge and experience in Kentucky’s contract law to draft or review your contract can help avoid future problems with interpretation and enforcement.
We understand that for business contracts, the initial goal is to build the foundation for your business relationship while its secondary goal is to provide a legal remedy if the other party breaches the agreement. In addition to asking about the terms you wish to include in the contract, we will discuss your goals for the agreement and explain any terms already written, making sure you understand the benefits and risks. I am a Louisville contract lawyer who can help. For assistance, call me at (502) 561-3455 or complete the form on this website.