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How to tell if contracts are enforceable

On Behalf of | May 27, 2020 | Contracts

Business agreements are just another part of doing business in Oregon, but getting it right can be harder than it seems. Not all business agreements constitute contracts or are even legally enforceable. Here is how someone can tell if his or her contract exists and can be enforced.

A valid contract should involve at least two things: someone who makes an offer and another who accepts it. These two parties should bargain for an exchange of something of value in return for some kind of promise. For example, a product or service in exchange for payment. Finally, the terms of the contract have to be defined enough for a court to consider it valid and enforceable.

But even with all of these elements, someone might still not be able to enforce his or her contract. If the other person does not have the legal ability to do so — or the capacity to contract — then it is not enforceable. This may apply to minors or even adults who are under someone else’s legal guardianship because of limited mental capacity.

A contract formed under undue influence, misrepresentation or undue influence is not enforceable. This means that there are a number of behaviors that are not acceptable when creating a contract, such as unfairly persuading another party to act in a way that is inconsistent with his or her welfare. Neither party can purposely withhold information or give false information either.

Invalid contracts can negatively impact business operations, putting Oregon business owners in difficult positions. This is why it is usually helpful to speak with an attorney about one’s options for creating an enforceable contract. Business owners who have already created a contract and are concerned about enforcing it may also benefit from seeking experienced guidance.