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Contracts: how signed agreements protect you

Contracts: how signed agreements protect you; many problems occur because of poor communication, lawsuit should be last resort Often, I hear from individuals that are in a dispute with someone else that involves rights (and probably

Contracts: how signed agreements protect you; many problems occur because of poor communication, lawsuit should be last resort

Often, I hear from individuals that are in a dispute with someone else that involves rights (and probably money). “We had a deal,” they may say, “and he/she/they broke it!” The legal term for deal is “contract.” With that, I ask the following questions:

Is there a contract? A contract is an agreement that is formed due to an offer being accepted, with consideration (exchange) to solidify the deal. When, you go to the store, you exchange money for the product you are buying; the store gets the money, and you get the product, that’s the deal. If your Uncle Jimmy tells you he will give you a car, but you aren’t paying him anything in return for it, he is making a gratuitous (free) promise he does not have to keep. So, pay him for the car, or at least for an option to buy the car later.

What are the terms?

If there is a contract, what are the terms? Ideally, the terms are laid out by a signed contract. If not, they can be determined by your words, other writings (emails, invoices), or your behavior.

Was the Contract Breached? How is it Fixed?

If someone doesn’t do what they are supposed to (provide a service or thing, or pay), there may be a breach. As to your remedy for the breach, think about what it would take to put you in the same position you would be in had the contract not been breached.

Things to do:

When you are entering into a contract (i.e. making a deal), do the following:

  • Get it in writing ahead of time. Ideally, a contract that states what each party is supposed to do should be written up. At the very least, confirm a “handshake deal” or oral conversation with a follow up letter or email confirming the terms.
  • Confirm all contact about the contract in writing.
  • Make every potential problem or misunderstanding (including a breach) known right away to the other party, with an eye toward resolving it if possible. Many problems occur because of poor communication.
  • Contemplate a lawsuit (small claims or otherwise) only as a last resort.

The above does not constitute legal advice, as individual cases turn on their particular facts.

Joe Richardson, Esq. is a native son of South-Central Los Angeles, and an attorney practicing tort, contract, and labor, and employment law in Southern California for more than 15 years. He also teaches and speaks on legal issues.

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