Contracts FAQ

What are Contracts?

Contracts are a written agreement between two or more parties, intended to not only outline the details of said agreement but to serve as evidence that an agreement between the parties does in fact exist. Contracts can be used to serve virtually any kind of lawful agreement, ranging from the purchase of property to royalty agreements.

Though contracts are fundamental to doing business in today’s world, it’s also worth mentioning that they are just one type of legal form. Other legal forms – such as notices – might not require that two parties sign them in order for them to still be considered valid.

What are contracts best used for?

Like any legal tool, contracts are best used when they suit the situation. Contracts are unnecessary for certain arrangements and may be considered standard procedure for others. For example, a bank is not going to be willing to make a loan without a contract in place that guarantees the agreement’s security. But you don’t need your in-laws to sign a contract to stay in your home for a few days.

Contracts are best used to protect interest, particularly financial interest. Any time a significant financial transaction or agreement is made, a contract is usually appropriate – even between family members and close friends. Contracts are also effective at reducing liability, as is the case for many types of release forms.

When is a contract “ironclad” in the eyes of the law?

Many people make the mistake of assuming that they are entitled to legal victories simply because of the presence of a contract. However, it’s important to recognize that a contract is still subject to a number of variables, including a state’s local laws, the context and the circumstances of the case, and even the contract’s validity.

A written contract, for example, is not the only type of contract. An oral agreement can also constitute a contract in many cases if it can be proved that the oral agreement took place. One great advantage of a written contract is that it not only provides for the agreement to take place, but also doubles as proof that the agreement exists.

All conditions being relatively ideal, a contract will always be enforceable under the law. However, it is a mistake to assume that the existence of a contract will always make an agreement ironclad; there may even be language in the contract itself that can nullify the agreement in certain circumstances.

What circumstances would render a contract invalid?

Understanding a contract’s validity is an important step in understanding contracts themselves. Here are a few conditions that must be satisfied in order for a contract to be considered valid:

• Age: When a minor signs a contract, it has to be approved by their legal guardian or else the contract can be considered invalid.
• Mental state and coercion: If a contract is signed when one of the parties is in a poor mental state (or are somehow coerced into signing the contract), it’s possible that the contract may be thrown out. This is why it is illegal to force someone to sign a contract at gunpoint, for example.
• Consideration: Even though two parties are essentially free to agree on just about anything, they cannot enter into an illegal agreement. This is why consideration – or some sort of value received – must exist for both parties. Otherwise, the contract might result in some sort of slavery or servitude which would not be legal in the U.S. Employment contracts and leases are prime examples of contracts with full consideration for each party involved.

If any of the above conditions is not lawfully met, then a contract may be considered invalid. The result is that contracts must be two-sided, lawful agreements. After these conditions are met, two parties could technically agree to any type of deal they want.

When is a contract “enforceable”?

A contract’s enforceability differs from its validity; it’s entirely possible that a contract would be considered valid but not enforceable. For example, a contract signed in 2012 that did not begin its true terms until 2014 would essentially be “unenforceable” for the two intervening years simply as a matter of practicality.

For that reason, much of the enforceability of a contract depends on the provisions and language of the contract itself. For example, a contract can be rendered somewhat moot if a provision is activated; for example, a contract is fully capable of invalidating itself. That’s why it’s important to know the full language and provisions contained in the contracts you sign; it may help you “get out of it” should the need arise.

What if I’ve already signed a contract and need to modify the terms of the agreement with the other party?

This is actually a common occurrence, and comes in the form of additional contracts: extensions, revisions, and amendments. These agreements will, of course, require the consent of both of the parties involved in the original contract; without this dual consent, there’s no point in seeking any further modifications. However, if both parties agree to the modifications, just about any part of the contract terms can be altered to suit the circumstances. It’s important that this be done correctly, of course, in order for the new contract to hold up against the old one.

How do I know it’s okay to sign a contract?

Provided that you’ve done all your research, that you trust the other party, and that you’ve sought all the legal advice you need, it all comes down to a matter of instinct. However, it’s important to consider that for many people, the signing of the contract is the moment an agreement becomes “official.” This depends upon your definition of “official.” You may have agreed to the terms of a contract months ahead of signing it; if so, then your work should be in ensuring that a contract validly and explicitly lays out all of the terms you had expected. Once you are confident that a contract contains exactly what you want it to contain, go ahead and sign.

Contracts

• Contract Forms Combo Packages

  Popular - Contract Forms Combo Package containing some of the most often used contract forms. Included are a general agreement, contract amendment and mutual rescission of contract. An agreement is also included which will terminate an existing contract.

• Employment Contracts

  Popular -Employment Contracts for use in a variety of employment situations. Included are employment agreements for key personnel, general employment agreements and a management agreement. An Independent Contractor Agreement is also included.

• General Agreements & Contracts

  Popular - General Agreement or Contract providing a standard form agreement for use in business transactions. This form sets forth the necessary provisions to be included in all forms of contracts or agreements.

• Sale of Business Contracts

  Popular - Sale of Business Contracts for use when selling or purchasing a business. Included are Sale of Business and Sale of Business Asset contracts which contains all provisions necessary to complete the transaction.

• Agency Agreements

  Agency Agreements for use when it is agreed that one party will act as an agent for the other. This agreement sets out all relevant terms as the party who is appointed as agent will be perceived as acting on behalf of the other party.

• Agent Agreements

  Agent Agreements for use when an agent agrees to represent a client on an exclusive or non-exclusive basis. These forms include Artist and Agent Agreement, Exclusive Booking Agent Agreement, Talent Agency Agreement and Exclusive Agent and Musician Agreement.

• Amendment to Contract

  Amendment to Contract to be used when an existing contract must be amended. This amendment sets out in specific detail the provisions to be amended and those which will remain in effect.

• Arbitration Agreements

  Arbitration Agreements which offer a less expensive and quicker alternative to the court system. This agreement spells out the terms which the parties agree to abide when settling a dispute and is legally binding.

• Artwork Agreements

  Artwork Agreements for use when hiring an artist to create a work of art for your home, office or commercial property. This agreement spell out the type of artwork, time frame for completion and how much the artist will be paid.

• Assignment of Contract

  Assignment of Contract to be used when assigning rights under a contract to another individual or entity. This assignment includes parties to the assignment, obligations to be assumed and effective date of the assignment.

• Book Publishing Agreement

  Book Publishing Agreement for use by a publisher and an author who wishes to publish and distribute books through the publisher. This agreement includes terms regarding royalty payments and publication formats.

• Confirmation, Change Orders, Certificates & Consents

  Confirmation, Change Orders, Certificates and Consents for use in a variety of situations. Included are a General Authorization which authorizes a certain action, Certificate which certifies the truthfulness of certain statements and a Change Order which effectively changes the terms of a contract. A Confirmation Agreement is also included.

• Content Provider Agreements

  Content Provider Agreements between a writer of content and a company or publisher who desires to purchase the rights in the content. This form set out the specific material to be purchased and the amount paid for the content.

• Finders Fee Agreement

  Finders Fee Agreement for use when one individual (or firm) seeks out a business relationship on behalf of another. This form sets out the specifics of this type of business arrangement including the use and divulging of confidential information.

• Franchise Agreements

  Franchise Agreements designed for use when franchising a business. This form sets out specific terms including business standards, representations and warranties and franchiser's rights of inspection.

• Ghostwriting Agreement

  Ghostwriting Agreement between an author and an individual who will write a book on a specified topic at the author's request. This form sets out the specific terms including the book's topic, use of confidential information and if the writer will receive book royalties.

• Graphic Designer Contract

  Graphic Designer Contract between a client and graphic designer who will plan and devise a project. This form includes specific details of the project including a detailed description of the assignment and how much designer will be paid.

• Manufacture of Goods Contract

  Manufacture of Goods Contract between two companies for the manufacture and distribution of certain goods or products. This agreement sets out all terms including remedies in the event the company is unable to deliver the goods.

• Merger Agreement

  Merger Agreement which will effectively merge two businesses into one entity. This form specifies the new structure of the company upon merger and who will assume any company rights and liabilities.

• Notices

  Notices which relate to contracts. These attorney-prepared forms include a notice of breach and assignment which can easily be tailored to fit your unique needs. Why hire an attorney when you can purchase these forms at a fraction of the cost?

• Personal Appearance Contracts

  Personal Appearance Contract between a venue and an artist or celebrity who will make a personal appearance at the location. This agreement contains the dates and times of the appearance and how the appearance will be marketed and promoted.

• Rescission & Termination

  Rescission and Termination forms to be used when rescinding or terminating a contract or agreement. These forms contain all terms including all obligations of the parties under the agreements and effective date of the termination or rescission.

• Research Materials Transfer Agreement

  Research Materials Transfer Agreement for use when transferring research and know-how to another party who will conduct further research. It sets out the exact research to be transferred and grants a license to use the materials for specific research purposes.

• Royalty Agreements

  Royalty Agreements between a writer and a publisher wherein a publisher agrees to pay royalties for the publication and reproduction of a composition. This form sets forth how royalties are calculated and when they will be paid.

• Sale of Goods Contracts

  Sale of Goods Contracts for use when selling goods or products. Included are basic and standard contracts for sale of goods and a contract for sale of goods on consignment.

• Waiver of Counsel

  Waiver of Counsel for use when one or more parties are advised to seek independent counsel. This waiver is often used in contract or business-related transactions.

• Waivers & Extensions

  Waivers and Extensions for use in a variety of contract and business-related transactions. Included are agreements which will extend time for performance and closing date, a waiver of condition and a waiver of default from a creditor to a debtor.