Orange Bend, FL – While the terms “contract” and “agreement” are often used interchangeably in business, there is a difference between the two. Generally, before a contract is signed, an agreement must be made between two or more parties. Once an agreement is put into writing (i.e. a contract) and signed, it becomes a legally binding agreement.
While the terms contract and arrangement generally go hand in hand, an agreement is an understanding or arrangement that two or more parties agree to. Agreements can be as simple as two parties saying they will hold monthly meetings to review data or an arrangement for one party to provide services to another for a set fee. Arrangements can be made verbally or even in silence, according to the Legal Information Institute.
How do contracts differ from agreements?
While contracts are formed by arrangements or agreements, contracts are what can be legally enforced. For example, if two entrepreneurs were to conduct business together, their contract would outline the arrangement and terms they are agreeing to. Once all parties sign the contract, it can generally be enforced in court if one or more party breaches the contract.
Some examples of breach of contract include:
- A party accepts payment for services but fails to complete the job.
- A party hired for services completes a job different from the one outlined in the contract.
Now, in order for a contract to hold up in court, it should contain the following elements:
- Mutual assent.
Mutual assent is when two or more parties agree on something, whether it is an exchange of products and/or services, and is “expressed by a valid offer and acceptance,” according to the Legal Information Institute.
- Adequate consideration.
Before the parties involved sign a contract, they should all be given the opportunity to consider the terms outlined in the document as well as assess whether they are fair.
In order for a person to sign a contract, they must possess the capacity to do so. This not only means they are of a sound mind but that they have the authority to sign.
The legal agreement outlined in the contract.
What if one party breaches a contract?
If a business owner in Orange Bend, FL believes the contract they signed has been breached by another party, the FL business law attorneys at Legal Counsel P.A. can determine what their next steps should be. Under certain circumstances, the issue may be settled out of court, however, if an Orange Bend, FL business law lawyer believes it is best to take legal action, they will assist the business owner with getting their claim filed and representing their interests.
Legal Counsel P.A. is located at:
189 S. Orange Avenue, Ste. 1800
Orlando, FL 32801
Email: [email protected]