NJ Contract Law Overview
Certain elements have to be present in order to form a contract. One party must offer an agreement, and the other party must accept it. There must be something of value exchanged between the parties (consideration). Additionally, the parties must be in agreement about the offer, the exchange of goods or services, and whether they are entering into a legal agreement. Parties also must be mentally capable of forming a contract.
When most people talk about contracts, they think about written documents used to transact business. Contracts don’t have to be in writing if two parties agree to the elements of a contract, but most people use written contracts to avoid vagueness. A written contract can include different sections like introductions, definitions of terms, statements of purpose, obligations of the parties, warranties, guarantees, representations and different attachments. The parties must sign the contract to acknowledge that they accept the terms.
Businesses can use contracts for many different activities. Employment agreements, non-compete agreements, licensing agreements, vendor agreements, purchases, partnerships, leases and sale of business arrangements are all examples of common business contracts. Even personal contracts may have a business aspect to them, like a lease agreement between tenant and landlord.
What should my contract include?
Often what makes a good contract is not what is in the contract but how the contract is written. Contracts should clearly spell out the details of the agreement. Anyone reading the agreement should understand what the agreement entails.
Additionally, all contracts should identify the correct parties entering into the agreement. This may seem obvious, but many times, one business will negotiates a contract with an individual not authorized to enter another business into agreements. In these cases, the actual business and the owners need to be identified in the contract.
No matter how complicated or long the negotiations were, contracts need to represent them entirely. A good contract leaves no stone unturned.
What legal actions do I have if the other party doesn’t live up to the agreement?
In order to prove a breach of contract, the plaintiff must prove: (1) the parties entered a valid contract; (2) the defendant breached the contract; and (3) the breach caused harm to the plaintiff. Usually breach of contract damages are limited to the economic value of the contract. Sometimes tort actions, like negligent misrepresentation or fraud, arise from breach of contract claims. These actions can address other harms the plaintiff suffered in addition to the nominal economic loss from the breach of contract.
Dash Farrow LLP is a law firm in New Jersey committed to helping businesses and individuals write sound contracts and protect their rights. Call 856-235-8300 or contact us online to speak with an attorney about your case today.