A contract can be defined as an agreement between two or more people that sets obligations that each person promises to carry out.
Not all contracts must be in writing, but having them in writing helps to avoid miscommunication and helps to protect you from dishonest people or businesses.
Contracts that must be in writing are listed below:
- Contracts involving the sale of real estate.
- Contracts involving the sale of goods over $500.
- Contracts where there is a promise to be responsible for another person's debt;
- Contracts that cannot be fulfilled within one year.
- Contracts for marriage.
What to consider before signing a contract:
- A signed contract implies that you have read, understood, and agreed to all of the document's contents.
- Have all blank spaces been filled in?
- Have all oral promises been written into the contract?
- Do not sign a contract under pressure.
- Remember you can negotiate over specific terms or not sign the contract at all.
- Take a parent, relative, or friend who can help clear up any confusing terms.
- You might want to take the contract to an attorney for help reviewing and understanding the terms.
- Don't sign a contract unless all of your questions have been answered and you feel comfortable with the contract.
Breach of Contract
If the other party to the contract does not fulfill the obligations imposed by the contract, you may have a claim for breach of contract. Generally, if this happens you are not required to perform the obligations that the contract imposes on you. You may also:
- Seek mediation, a process where a third party is used to help resolve differences and disputes.
- Go to court seeking an award of damages.
Canceling a Contract
There are limited circumstances that enable you to cancel a contract after you have signed it. Those situations include:
- You were not legally competent to sign the contract;
- You signed the contract as a result of fraud, misrepresentation, or misleading business practices;
The goods you purchased under the contract are defective and the seller does not repair or replace the item(s).