In the current business landscape, where transactions and agreements are commonplace, the drafting of commercial contracts stands as a fundamental cornerstone.
From the thorough assessment of the transaction’s nature to adapting to the specific circumstances of each client, preliminary legal counsel plays an essential role. And this, at MRK International Law, is something we understand well.
Two tipes of contracts
There are two basic types of contract, ruled by different laws. One is related to the provision of services, and is ruled by customary law, the second is related to the purchase and sale of goods.
In theory, when two parties agree on an operation or the provision of some type of service, what corresponds as a consequence of said agreement, is to comply with the regulations.
The above is framed within what we can call the “ideal situation”. However, we know that the business environment is not exactly an ideal world. Which is why we have laws to govern its operation whose purpose is to provide a control framework that ensures compliance with what is agreed. This is where having the advice of a business lawyer makes sense.
A business lawyer can assist you in both the preliminary stage, where the agreements and guidelines are established, trying to cover all instances and eventualities, as well as at times when these guidelines must be subject to the scrutiny of situations that put them to the test.
In any commercial relationship, gray areas may arise, instances that those involved may approach with more or less difficulty, depending on the precautions and details previously taken in the contracts. It is there where a business lawyer will provide light and guidance both at the time of enforcing the rights agreed contractually, and before possible judicial instances.
Essential elements of the contract
Drafting an effective contract involves the careful inclusion of various essential elements that not only render it legally valid but also establish the groundwork for its enforceability. Below, the key elements to be considered when drafting a contract are detailed:
- Clear and Defined Offer: The offer must be specific regarding the terms and conditions of the contract. Lack of clarity can lead to misunderstandings and future disputes.
- Express or Implied Acceptance: Acceptance must be clear and unequivocally manifested. It can be explicit through a statement or implied through actions indicating agreement.
- Manifestation of Intent: Both parties must demonstrate their intention to be legally bound by the terms of the contract. This excludes informal or social agreements not intended to be legally obligatory.
- Capacity of the Contracting Parties: All involved parties must have the legal capacity to enter into a contract. This implies being of legal age and mentally competent.
- Reciprocal Benefit: There must be a consideration or mutual benefit for both parties. Lack of consideration can invalidate the contract.
- Choice of Law: In international contracts, it is crucial to specify the law governing the agreement. This provides clarity on jurisdiction and the regulations that will apply in case of disputes.
- Legality of the Object: The object of the contract must be legal. Contracts involving illegal or immoral activities are void.
- Clarity in Language: The wording must be clear and understandable to avoid misunderstandings. Define specific terms and conditions to prevent ambiguous interpretations.
- Commencement and Term Date: Specify the date on which the contract comes into effect and, if necessary, the duration of the agreement. This helps avoid confusion about the temporality of the commitment.
- Dispute Resolution Clauses: Include provisions for resolving disputes, whether through mediation, arbitration, or litigation, providing a clear path in case of disagreements.
- Modification Clauses: Establish how modifications to the contract can be made and the procedures for doing so.
- Authorized Signatures: All parties involved must sign the contract. In some cases, the presence of witnesses may be required to strengthen the validity of the agreement.
Faced with a breach, is my contract enforceable?
The law is clear about the basic requirements that a contract must fulfill in order to be enforceable.
In principle, at the time of signing, both contracting parties must consent by mutual agreement. There must be an offer and an acceptance. Also, there must be a statement setting out what each of the parties agrees to provide. Without this statement, there is no valid contract.
The law of contracts is complex. It depends on numerous associated factors, such as the intention of each of the parties and what was given and received. In all cases, a business lawyer will help resolve any contractual dispute in the best possible way. And above all, what you will always look for is the possibility of reaching an agreement prior to any type of action before the courts.
In the vast majority of cases, agreement between the parties usually saves a lot of money. However, for this to be possible, it is essential to ensure that both parties are satisfied and that commercial activity can continue. In this way, the difference that caused the dispute becomes learning and is included in the contract in order to be able to solve it in a simple way the next time it arises.
Preliminary legal advice
In preliminary legal advice, the attorney thoroughly examines the nature of the transaction and assesses potential legal risks associated with it. This includes contractual, regulatory, and legal aspects that could impact the fulfillment of the agreement.
At Markowicz International Law, we inform the client about potential legal challenges that may arise during the execution of the contract. This enables making informed and proactive decisions.
We tailor our approach to the client’s specific circumstances and the industry in which they operate. It’s not just about complying with general laws but customizing the legal approach for the specific case.
A business lawyer will try at all times to reach the least expensive, but at the same time secure, solution to resolve a conflict.