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Will my contract stand up in court?

It might seem like tempting fate to consider whether a contract you negotiate with another party stands up to the scrutiny of the court. Relationships and circumstances change unexpectedly, so better to be safe rather than sorry.

Ensuring that the contract contains the proper elements with the understanding that it might become the subject of litigation someday makes good business sense.

What does a valid contract include?

In order for a court to consider a contract valid, it must contain certain elements, as follows:

1. Capacity to contract: You and the other party or parties to the contract must each have the capacity to enter into it.

2. Free and genuine consent: No party should feel coerced or otherwise under duress when entering into the contract.

3. Intention to create a legal relationship: A valid contract creates a legal relationship among you and the other parties to the contract.

4. Offer and acceptance: A contract must contain an offer from one party to provide a service or product to another party or parties. In turn, those parties must accept the offer.

5. Lawful consideration: In return for the products or services, the receiving party must provide "consideration." For example, the recipient of the products or services provides the provider of the same a monetary payment.

6. Certainty and possibility of performance: Each party to the contract must be able to perform its portion of the contract.

7. Legal objectives: If the contract's provisions violate public policy, the law or, possibly, morality, a court could void it.

8. Legal formalities: In most cases, the courts require written business contracts. Registration requirements vary depending on the contract. Some contracts must contain certain legal provisions as well as what state law governs the contract or how to resolve disputes between the parties.

Without these elements, a court might invalidate the contract. If you and another party to the contract ended up in a dispute and the court declared it invalid, your business would undoubtedly suffer. Hopefully, litigation of the contract will never arise, but, if it does, you should feel secure in the fact that the contract protects your interests.

Therefore, you gain the advantage by involving an attorney in the creation of any contract you want to execute. An attorney with the knowledge of preparing and litigating contracts provides you with at least some assurance that the contract meets the required legal standards. No matter what type of contract you are considering, a Cincinnati business litigation attorney can provide invaluable legal and business insight.

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