Legal Help - Legal Advice - How can a Party Form the Most Effective Contract?

Every day, people enter into contracts with one another, both oral and written. In most of those instances, there are very few problems with enforcing the contracts and with people fulfilling their obligations under the contracts. In general, people agree to particular terms, they agree to be bound by those terms, and they fulfill those terms. However, there are some instances in which parties find themselves having to go to court due to problems with their contracts. Contracts are generally private matters between parties and the goal when creating the contract should be to create the most effective contract possible, so that the court will not be placed in the unenviable position of having to determine what the parties to the contract intended when they created the contract. If the court gets involved in the matter, there could be unsatisfactory results for all of the parties involved. That being said, it is best that the parties take particular actions to ensure that their contracts will be enforceable.

First of all, if at all possible, most contracts should be in writing. Although, oral contracts are just as enforceable as are written contracts (with some exceptions), problems arise when there is disagreement as to the terms of the contract. When there is disagreement about the terms of a written contract, both parties can look to the written language of the contract as can the courts if the matter is heard by them. When there is an oral contract, on the other hand, it is essentially the word of one party against the other party. There is an old joke that an oral contract isn't worth the paper it's written on. That's a reference to the fact that it can be very difficult to prove that an oral contract exists. Absent proof of the terms of the contract, a party may be unable to enforce the contract or may be forced to settle for less than the original bargain.

Parties to a contract should also make the terms of their contract clear and concise. This lessens the chance of there being a mistake made by either or both parties. Vague and ambiguous language leads to misunderstandings, disputes, and lawsuits. Parties should say what they mean, be specific about what they are saying, and be sure to cover all of their bases. They should not assume that the other party knows what their subjective intent is. Contracts involve the objective intents of the parties. When a court is determining whether or not a contract exists, it is going to look at the actions of the parties and what they said and wrote, rather than what a party might have subjectively meant.
Parties to a contract should also be certain to only agree to terms with which they are comfortable because once they agree to those terms they are bound by them. In some instances, another party to the contract may excuse the actions of the other party or allow them to change their mind and not fulfill the duties, however, this is not guaranteed. Therefore, parties simply must understand to what they are agreeing and be willing to fulfill their agreement.

Parties to a contract should use terms consistently so as to lessen confusion. For instance, if they use the term “fee” in their contract, they should consistently use it and with the meaning that they all recognize. They should not use the word “fee” in one instance and then use a different word even if it is synonymous with “fee.”
Parties to a contract should be certain that the contract to which they are assenting is legal. A contract with someone that lacks capacity, for instance, would most likely be unenforceable. A contract for an illegal action would certainly be unenforceable and in some instances there could be criminal liability as well. Also, if a contract is supposed to be written (due to the Statute of Frauds), and it is not written, it would also be unenforceable.

Contracts will be enforceable if they contain the aforementioned elements, agreement, manifested by a clear offer and acceptance, and consideration. Parties to a contract must always have these elements in mind as they attempt to create an enforceable contract. If any of these elements is lacking, the contract will be unenforceable. Ultimately, a contract is created when there is a “meeting of the minds,” so if there is any indicator that there is not a “meeting of the minds, such as by a mutual mistake, indefiniteness of terms, lack of capacity by one of the parties, and so forth, no contract will exist.

How can a Party Form the Most Effective Contract?

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