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Simple Guide to Verbal Contracts

Simple Guide to Verbal Contracts

In the
United States, verbal contracts will usually refer to unwritten or oral
contracts. An unwritten contract will usually mean that the contract or
agreement was made through the use of spoken words as opposed to formally
writing and entering into record the provisions of said contract.

The United
States has laws that will recognize verbal contracts in a court of law and
enforce the agreed upon provisions in the case of a dispute. However, because
verbal contracts are oftentimes unwritten contracts, there will be inherent
problems involved in a legal dispute surrounding verbal contracts.

The most
common issue which arises is that verbal contracts are extremely hard to prove
to have ever actually occurred in the first place. Evidence such as witnesses
and an overall preponderance of evidence will be necessary to prove that a
party violated verbal contracts. Therefore, it can be deemed that unwritten
contracts, as opposed to formally written contracts, are not weighed as heavily
or given the same legal merit in a court of law due to the lack of actual
physical evidence of the contract.

Privity of Contract Explained

Privity of Contract Explained

Privity of contract is a legal
doctrine that holds that a business contract, along with any other type of
contract, may not confer rights or impose obligations to any person or agent
except for the specific parties that have formed the contract.

Privity of contract is most
commonly an issue which arises during business contracts that have been formed
to allow for the sale of goods or services. Horizontal privity of contract
becomes an issue when the benefits bestowed by a contract are given to a third
party or a party that was not a part of the original contract. Vertical privity
of contract involves an independent contract that develops between one signer
of the original contract and another individual or other legal entity.

There are certain circumstances
under which privity of contract may be set aside which will allow the legal
entity who is not directly a part of the business contract to be allowed to sue
to force a party to the original contract to uphold their obligations. Privity
of contract will only allow a third party to the contract to go against one of
the original parties to the contract beyond the ability to collect the third
party’s entitlement to a benefit under the contract.

Using A Contract Termination Letter

Using A Contract Termination Letter

A contract termination letter template may be used by a company in order to ensure that they terminate any contract in which they are currently in a method that will completely avoid further complications which can cause further disputes.
A contract termination letter template can be created to create an employment contract termination letter, a business contract termination letter, or a construction contract termination letter. These three contract termination letter types are the most common, which means that one of these three contract termination letter templates is most likely to be encountered or needed.
The essential elements to include in a contract termination letter are the names and specifications that can be used to identify the party to the contract who is receiving the contract termination letter. The contract termination letter should contain an opportunity to refer to the terms and conditions that were present in the original contract that empowers the party to terminate the contract.
If the contract termination letter involves a contract that requires the party breaking to contract to provide monetary compensation for breaking the contract, it is essential that the contract termination letter mentions how the payment will be provided.
A contract termination letter must include the code under which the individual gains the authorization to terminate the contract. This restriction primarily applies to a contract termination letter provided by a company to an employee. 
A contract termination letter should be completely professional.

Contractor Explained

Contractor Explained

What is a Contractor?
A contractor is an individual or company who is responsible for the day-to-day operations and oversight of a construction site. In addition to these functions a contractor will also manage the transactions involved in the site, primarily trades and deals with vendors.
A contractor is also responsible for keeping touch with the general contractor and the involved parties involved throughout the course of the project. 

Price Evaluation Process:
Before starting a construction project, a contractor must visit and assess the construction site. Upon evaluating the piece of property, the contractor will formulate a price, referred to as an estimate. The contractors will then evaluate the cost of all materials, equipment, as well as the cost of labor. After analyzing the expected cost of the project, the contractor will provide the owner of the building with an approximate price for the construction process. 
Following the delivery of the expected price for the project, the contractor will draw up contracts. These contracts will elaborate on the budget and the conditions revolving around the plans and specifications of the project. The contractor will utilize a design professional, such as an architect, to better evaluate the necessities of the project. That being said, in the majority of construction sites, the contractor will also act as the project engineer or the project manager. 

What is a Contractor Responsible for?
A contractor is responsible for providing the construction companies and the individual workers with all material, including labor, equipment and those services necessary for the construction of the project. In order to accomplish these tasks, the contractor will incorporate specialized subcontractors to perform specialized tasks or portions of the construction process. 
The responsibilities of the contractor will vary depending on the size and complexity of the construction project. In general; however, a contractor will be responsible for providing or accomplishing the following tasks: filing for building permits, securing the property, managing the workers on site, providing temporary materials and utilities on site, providing engineering functions and surveying for the site, disposing of wastes left over by the construction process, monitoring the schedules of workers, balancing the costs of the project and maintain accurate records regarding the finances and the construction process as a whole.


Example of a Contractor’s work:
An owner of a building or a real estate developer will develop a program based on their needs and subsequently choose a site. An architect will then assemble a design team of engineers and other experts to design the building and pinpoint specifications needed for construction. During this phase, the contractor will frequently participate in the design efforts by providing services where they will aid in providing price estimations and information revolving around scheduling. 
The owner, contractor and architect will then work closely together to meet the deadline and budget of the project. The contractor will work with subcontractors to ensure that all quality standards have been met, in addition to the budget and timeline.  

Oral Contract Vs Implied Contract?

Oral Contract Vs Implied Contract?

According to contract law, an oral contract is not considered an implied contract. An oral contract is an agreement that is agreed upon only by spoken communication. Although an oral contract originates from the mouth, it is common for a written contract to be created after the oral contract is stated.
In contract law, oral contracts are considered just as valid as written contracts. Some jurisdictions require that a contract be written up after an oral contract is made. Within this type of circumstance, the document must state that the original agreement was created verbally. 
An implied contract is an agreement that is not generally agreed upon. Instead, it is something that is more assumed to be followed. An example of this type of contract would be an employment contract where the employer does not specify hours but does specify the total amount of time required to be worked. 

Make Sure You Know the Basic Principles of Law of Contract

Make Sure You Know the Basic Principles of Law of Contract

What is the Law of Contract?
As is common with the majority of legal principles, the basic fundamentals of contract law will vary by jurisdictions throughout the United States. In all jurisdictions; however, a contract must require an offer, a subsequent acceptance or agreement to the stipulations within the contract, and consideration.
These characteristics are in essence, the foundation for a document to be regarded as a legally binding and valid contract.
 
Basic Principles of the Law of Contract:
The law of contract states that the first step required to form a valid contract is that an offer must be formally made by one of the parties to another. A common example to elucidate upon this principle is found in the sale of property; the purchaser, in this example, must make an offer to purchase the underlying property. This offer may include simplistic or complex terms, but it must be concrete and affirmed through written documentation.
Following the offer, the contract, as stated by the law of contract, must be accepted by the offered party. Using the sale of property as an example, the seller must affirmatively accept the offer; the original offer may be accepted in a written or spoken form.
If the offered party proposes a counteroffer, an acceptance is not realized. When a court determines whether or not an offer and acceptance was realized, the judicial body using the law of contract will look for a formal meeting or a concurrence of wills to decide if the requirements latent in the offer and acceptance statutes of the law of contract had been satisfied.
Lastly, the basic principles of the law of contract will require consideration to be given for the contract to maintain a legal or valid status. Consideration simply means that something of value was exchanged between the agreeing parties. In most instances, the consideration takes the form of money or an asset that holds considerable value.
In some scenarios; however, consideration can take the form of refraining from performing a function or doing something that the party is otherwise entitled to initiate. Regardless of the form, the consideration given must be sufficient, but does not need to be adequate to validate the stipulations latent in the contract.
 
Court Evaluations of a Contractual Agreement:
 
In addition to the basic principles of the law of contract, a court system, when evaluating the validity of a contractual agreement will evaluate the capacity of the party’s when the agreement was reached. The capacity to enter into a contract may be affected by numerous factors; for instance, minors do not possess the legal capacity to enter into a contract. In addition, a person’s mental state may also be considered when evaluating whether the person had the capacity or ability to enter into a valid contract.
Numerous courts will look to the legality of a contract when determining its validity. If a contract requires an individual to do something illegal, it will be deemed void on its face.

Your Guide to Understanding Contract Management Software

Your Guide to Understanding Contract Management Software

What is Contract Management?
Contract management, is the management of contracts that are created between customers, partners, vendors or employees. The field of contract management includes negotiating the terms and conditions present in these contractual agreements, while subsequently ensuring that stipulations within the contract adhere to compliance issues designated by the underlying company or industry.
In addition, contract management entails the documenting and agreeing on all changes that may come to light during the implementation and execution of such contractual agreements. 
Contract management can be best summarized as the formal process of efficiently managing the creation of a contract, along with expediting the execution and required analysis of the contract. The systematic approach of contract management is required to maximize the financial and operational capabilities and performance of the underlying parties. In addition, contract management is undertaken to mitigate the risk associated with a contractual agreement.
Contract management deals with contractual agreements that are made in a commercial setting; common forms of commercial contracts will include employment letters, purchase orders, sales invoices and utility contracts.
The more complicated forms of commercial contracts will include contractual agreements regarding constructions projects, the exchange of goods or services that are regulated by a government authority or require the delivery of technical specifications, intellectual property agreements and issues revolving around international trade. 

Contract Management Software:
The majority of large corporations in the United States, actively manage and maintain nearly 50,000 contracts at any given time. The majority of these contracts, are managed in a tradition or manual sense; however, approximately one quarter of such companies have recently implemented a form of contract management software to expedite the management of such contracts. 
Contract management software is an automate program to help streamline the creation and negotiation of a business contract; contract management software achieves such functions through compliance and renewal and through exhaustive monitoring of the underlying contracts. Contract management software requires the programs to maintain a corporate contract, to improve a respect company’s access and visibility in regards to the control of contracts. 
The majority of contract management software will also enable the corporation to create and observe warehouse standard contracts and business terms and conditions for such contracts through various templates. Other forms of business contract management software will utilize a Service Lifecycle management program, which will bundle contract management with all other forms of management in relation to service-based operations. 
This function enables the contract management software to improve the company’s customer retention; through these various functions, the average piece of contract management software will allow companies to better achieve savings during procurement negotiations and procurement spending. In addition, contract management software, will enable the using corporation to improve sales effectiveness and increase compliance by allowing contracts to ultimately drive day-to-day operations. 

Contract Law Defined

Contract Law Defined

Contract law is defined as the body of law that governs oral and written contracts.  Included in contract law are topics on the nature of contracts, limitation of actions, breach of contract, termination of contract, and many more.  Put simply, contract law deals with the legal issues surrounding the formation, duration, breaching, or termination of contracts.  
For example, the Uniform Commercial Code is used in contract law to harmonize the law of sales and commercial interactions in the United States.  This Code is used in almost every state and is considered the standard in most states regarding laws on the sale of goods.  The Uniform Commercial Code is a long-standing act in contract law, a collaboration between the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute.


Breach of Contract
One of the most prevalent subjects in contract law is the idea of a breach of contract. A breach of contract is a legal concept characterized by one or more parties failing to honor the provisions stated in a contract.  For example, if an employee signs a non-compete agreement with an employer and begins his or her own company after being fired, he or she can be sued for breaching the contract.  Breaches of contract come in four main types:

Minor Breach
A minor breach of contract, also referred to as an immaterial breach, occurs when the non-breaching company is entitled only to compensatory damages.  

Material Breach
Unlike a minor breach, a material breach allows the non-breaching party to collect damages and a court-obligated performance of conditions stated in the contract.

Fundamental Breach
A fundamental breach, also referred to as an anticipatory repudiation, is a breach of contract so tangible that it may allow the non-breaching party to terminate the contract.  The party is then entitled to also sue for damages.


Anticipatory Breach
An anticipatory breach, also known as anticipatory repudiation, is when one party indicates that it will be unable to perform as the contract states, or that future non-performance is unavoidable.  In this case, the anticipatory breach may be treated as an actual breach and the non-breaching party can then sue for damages.
Avoiding a breach of contract is important for many different reasons.  For example, breaching a contract can lead to legal fees, a damaged business reputation, and damages.  These damages may include:

Compensatory damages
Compensatory damages are damages used to compensate for losses in order to bring the non-breaching party back to the position before the breach.


Nominal damages

Nominal damages are awarded when a breach occurs with no measureable financial loss.

Punitive damages
Punitive damages are made to the non-breaching party whose payment can extend beyond the financial losses of the breach.  They are meant to punish “wrongful acts” and are not specially aimed to remedy breaches of contract law.

Liquidated damages
Liquidated damages are identified by parties in the contract itself.
In addition to damages, a breach of contract may also bring specific performance or cancellation and restitution.  In specific performance, the court orders that the breaching party perform duties written into the contract.  In cancellation and restitution, the non-breaching party receives damages and is entitled to cancel the contract, voiding its terms.

Enforcing a Contract

To collect these remedies for breaches of contract, parties usually turn to small claims court.  However, going to small claims court can cost a significant amount of time and money in court appearances and court fees.  Many times, the parties will choose to go in another direction.  In these cases, a dispute may be brought to mediation or arbitration. 

Lawsuit
In most cases, the non-breaching party will sue for damages in small claims court.  A lawsuit can result in a number of remedies for the breached contract, including damages, specific performance, and cancellation and restitution.  A lawsuit can provide damages that will provide the non-breaching company with remedy for the breached contract, especially if it is measurable by the court.

Mediation
Mediation involves both parties working with a mediator to find ways to resolve the contract dispute.  A mediator is responsible for finding a solution that works for both parties.  Mediation allows the parties to minimize risk and control costs.  

Arbitration
Arbitration is similar to mediation in that there is a third party reviewing the dispute.  However, since arbitration is mandatory and legally binding (most of the time), many people will choose to undergo mediation instead of arbitration.

Contract vs. Agreement

Contract vs. Agreement

The essential differences between a contract and an agreement are minor. In essence, a contract’s outline is more formal and more rigidly presented than the terms outlined in an agreement.
A contract is a legally binding agreement reached between two parties, the terms of which the courts have the authority and obligation to enforce. An agreement is a less formal creation of an obligation between the two parties.
An agreement usually lacks one or more of the essential elements that are required to be present in order to form a valid contract that will be considered legally enforceable by a court of law.
Contracts outline the terms of the relationship that should be formed between the two parties to the contract. An agreement also outlines the terms of the relationship between the two. However, the difference is that the contract’s outline is far more rigid than that of a contract.
The essential difference between an agreement and a contract is that typically an agreement will only modify a contract that is already in place but does not place an obligation on either one of the parties to provide consideration to the other party, which a contract requires. A contract can involve the exchange of promises between the parties to the contract, while an agreement may simply involve one party accepting the offer from another party.

What are the Legal Actions To Take Against A Breached Trust

What are the Legal Actions To Take Against A Breached Trust

A breach of trust can occur in any number of circumstances, and in
each case there may be a differing form of legal recourse. When the breach of
trust is included with a breach of contract, there may be both legal and civil
penalties. 

 

For example, if there is a breach of contract between a day care
center and a parent, it may also include a breach of trust. If the day care
center took responsibility to care for a child and then failed to do so, they
may be charged with both breach of contract and breach of trust.

 

The result of those activities may influence whether or not the
charges are criminal or civil. If, for example, the child was injured because
of a failure to care for that child as promised, the charges would likely be
civil and criminal.

 

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