Monroe County, Florida Contract Review and Formation
Contracts are one of the cornerstones of doing business in our society. They can govern anything we want them to, with rare exceptions, and can be complex or very simple. When you are a party to a contract, it is imperative that you make sure you know what you are getting into. By having an experienced Monroe County, Florida attorney review or draw up a contract for your use, you know you are signing something that you can trust.
Contract Formation: Three Elements
To have a valid contract, you must have three things: an offer, an acceptance, and consideration for that acceptance. The law is notoriously complex about what constitutes an offer (versus a counteroffer or refusal), and what constitutes acceptance of that offer. A contract may be written or oral, though it is usually recommended to insist upon a written document for record keeping purposes. Attempting to enforce an oral contract is much more difficult, and may even be banned by Florida’s Statute of Frauds. Certain contracts are required to be put in writing by the Statute of Frauds because the likelihood of their being breached or altered if they remain oral is too high.
Also, contrary to popular belief, most contracts do not have an automatic right to cancel at any time. The right of rescission only exists in certain types of contracts – for example, car financing offer sheets usually have this right attached – and if your contract is of another type, you must comply with it once an offer, acceptance and consideration have all been performed. If you do not, you may be held in breach of contract.
A breach of contract is when a party to a contract fails to perform the service or provide the goods that were promised. In rare cases breaches are excusable, but most of the time a breach of contract will result in a suit to compel performance. It is also possible that the contract will include a damages clause, be it liquidated, special or another type. If a damages clause is in the contract, it is intended to discourage the parties from breaching the terms.
Contract Review: Unconscionability
If you have already been given or created your own contract, it is still a good idea to have your attorney review it to ensure all its provisions are enforceable. A provision in a contract is considered unenforceable when it is against public policy, or in other words, would be so fundamentally unfair that no one without ulterior, malevolent motives would insist on its performance. A good example would be a damages provision where the amount requested is so large that it would amount to a penalty (an unreasonable fine, one that could bankrupt or seriously harm a party’s finances); in most cases penalty clauses are ruled to be unenforceable because no one should be expected to go bankrupt even if they do breach a contract.
Sometimes there will be a dispute over whether a contract must be declared null and void, or whether the offending provision can be severed. Severability is the idea that certain provisions may be severed from the contract without materially altering the intent of the document as a whole. Many contracts will include a severability clause stating just that, which can have an effect on negotiations and value of goods and services. For example, if a tenancy agreement looks acceptable except for one provision, but there is a severability clause, the prospective tenant may try to have the offending provision severed, leaving them with a contract that is still acceptable by their standards.
Contract Law Is Complex
As you can see, there are a lot of potential pitfalls in contract negotiation and review. It is best to have a competent legal professional on your side to prevent any misfortune or misinterpretation of your contracts. The experienced Monroe County contract review and formation attorneys at the Silver Law Group are happy to assist you with all your legal needs. Contact our Islamorada office today for a free initial consultation.