Need Help Drafting or Reviewing a Contract?
Chicago Business Contracts Attorney Explains Legal Agreements
Contracts are legal agreements between two or more parties, often in a business context. For business owners, contracts are crucial to essentially all business transactions, including interactions with vendors, customers, employees, insurance companies and more. Usually, but not necessarily always, a contract is written and signed by all parties involved. However, any kind of contract must meet certain requirements to be valid and legally binding. If all of these requirements are met, then you have legal recourse to enforce the terms of the contract, if the other party does not fulfill promised duties.
Ensuring that all your contracts are legally binding and enforceable is vital to keeping your business up and running. Having a Chicago business contracts attorney draft or review any kind of agreement can help ensure that you do not face any difficulties in the future. At LAD Law Group, P.C., founder and business lawyer Jemelle Cunningham offers a full range of legal services to entrepreneurs launching startups and established business owners alike. Our legal team can assist you with contracts for any kind of business transaction in Chicago or the surrounding areas.
What are Common Types of Business Contracts?
Almost every business transaction involves a contract of some kind. To keep your business running, you need to know what you can expect from your employees, vendors and even your customers, as well as what they expect of you. A legal contract eliminates the guesswork in business relationships and also gives you options if the other party does not honor the agreement. Some of the most common types of business contracts include:
- Vendor agreements. A vendor is a person or company that provides goods or services to your business. Since your ability to do business likely depends on these parties, solid vendor agreements are essential. These contracts typically outline details of delivery or service, payment terms and more.
- Service contracts. These are agreements that pertain to the maintenance of equipment, technology or other goods. Depending on your business, you may have service contracts with customers and/or your vendors and contractors.
- Sales contracts. These kinds of agreements may include bills of sale for certain goods as well as warranties, security agreements and purchase orders.
- Operating agreements. Generally, only limited liability companies (LLCs) require operating agreements. These contracts define each co-ownerâ€™s financial and business duties or powers. If you own an LLC alone, you still need an operating agreement to separate your personal interests from your business interests.
- Employment contracts. These agreements define your employeeâ€™s duties, compensation and other conditions.
- Shareholder agreements. If you own or invest in a corporation, then you need a shareholder agreement to outline your rights, obligations and protections. It also includes details on the businessâ€™s operation and functions.
- Leases. A lease is one of the most common types of business contracts, and can be quite complex. Whether you lease out property or rent from someone else, a lease should protect your interests and state your obligations.
What are the Requirements for a Valid Contract?
To qualify as a legally enforceable contract, an agreement must meet certain requirements. While Illinois does not require that all contracts be written (meaning verbal contracts are sometimes enforceable), getting an agreement for a business transaction in writing is still a good step. Additionally, all legal contracts must include:
- Consideration. A contract cannot be one-sided. That is, each party entering the contract must receive some benefit from the agreement. In exchange, each party must have a â€śchange of positionâ€ť, meaning that you make a commitment to do something you were not already legally obligated to do, or vice versa. Consideration can be complex, so it is always best to consult a business contracts lawyer before signing anything.
- Offer and acceptance. A contract is generally unenforceable if one party was coerced into signing or did not understand the agreement. There must be a clear offer and clear acceptance of that offer.
- Capable parties. Certain parties cannot legally enter contracts, such as minors.
- Mutual agreement. Both parties must agree to the terms of the contract and assent to abide by those terms.
Additionally, a contract is unenforceable if it includes anything illegal. For example, employment agreements cannot force a worker to give up his or her workplace rights, such as the right to overtime pay, if applicable. Also, some states have other laws that impose additional requirements on contracts.
Learn More From Our Chicago Business Contracts Attorney
Contracts of all types are essential to your business. Therefore, you should take steps to ensure they meet all requirements and are valid in case a contract dispute arises. A business lawyer from LAD Law Group, P.C., can assist you with any kind of agreement. We can help you draft employment contracts, vendor agreements and other documents. Or, we can review any contracts prepared by another party to see that the terms protect your best interests.