Contracts & Commercial Law

A binding contract generally requires an offer, acceptance, consideration (something of value exchanged), mutual intent to be bound, and parties with legal capacity. The purpose must also be lawful; agreements for illegal acts are not enforceable.

Verbal agreements can be enforceable, but they're harder to prove and some contracts must be in writing under the "statute of frauds" — such as real estate sales, agreements that can't be performed within one year, and (in many states) sales of goods over $500. Written contracts are always safer.

Common exits include a termination clause in the contract, mutual agreement to cancel, the other party's material breach, or a legal defense like fraud, mistake, or impossibility. Review the contract's termination and notice provisions first, because improper cancellation can itself be a breach.

For a material breach you may be able to stop performing, demand the other side fix it, and sue for damages. Typical remedies are money damages to put you where you'd have been if the contract were performed, and occasionally specific performance where money isn't adequate.

An arbitration clause requires disputes to be resolved by a private arbitrator instead of in court, which can be faster and more private but limits appeals and sometimes discovery. Whether to include one depends on the deal size, your bargaining position, and how important court access is to you.