Forming a Business Contract

If you're in business in the State of Georgia, chances are excellent that you have signed a number of contracts. As Atlanta business litigators, we know that many business disputes can be avoided by clarifying, adding, or deleting language to a weak or invalid contract.

For a contract to be legally valid, it must contain the following elements:

Consideration – There must be a _quid pro quo_ in the contract to make it valid. In other words, both parties must be giving and receiving something. The exchange can involve money, goods, services, rights, guarantees, or any combination of these. So a contract to purchase a used car for cash would qualify since both parties are offering consideration. As would a contract for a mechanic to begin work on a car for the promise of payment upon completion.

Mutual Assent – Both parties must understand and agree to the terms of the contract. It's not enough for one party to later claim that he or she didn't understand the terms of the contract to have it voided. If the contract clearly states the terms, and both parties agree at the time that the contract is entered, it should stand up as valid in Georgia.

Offer and Acceptance – There must be an offer to do something or deliver something and an acceptance of that offer.

Legal Purpose – All terms of the contract must be legal for it to be valid and enforceable in Georgia or federal courts. For example, you cannot make a contract for the purchase of contraband (i.e. cocaine, uranium.)

Ability to Contract – Neither party can be a minor nor can they be mentally incompetent.

Although these may seem like fairly basic guidelines, the content of the contracts themselves may be much more complicated. A simple contract to lease office space in Atlanta may have dozens of terms and conditions that protect the rights of both the landlord and the tenant: term of the lease, amount of payment, conditions for eviction, et cetera. In addition to what the two parties want and agree upon, the contract must comply with all federal, state, and local laws and ordinances.

It's always advisable to have a Georgia business attorney review your contracts and answer your questions before you sign them. In addition, your lawyer should prepare any standard forms that your company may plan on using to contract with customers. Your business' contracts are too important to rely on weak and unreliable contracts. Contact one of our contract attorneys today to discuss your contract drafting needs. (770) 887-3162