Contract Disputes: When Meeting of the Minds Turns Into a Headache
Contract Disputes in Texas
In the business world, a key component of brokering a deal is to have a “meeting of the minds.” This often flowers into an agreeable exchange of services or products and expected compensation. Typically, to facilitate this process, a contract is drawn between the parties, and signed or verbally agreed upon. This is generally a commonplace process that is transacted with little issue.
But what happens when it goes wrong? And what do you do if you find yourself in the middle of an unhappy, unlucky contract dispute?
Before dissecting unsuccessful contracts, let's first briefly review the elements of valid contracts. What constitutes a valid contract?
A contract is a legally binding agreement between at least two parties. In order for a contract to be valid, there are some essential elements that must exist:
Offer – A contract must contain some type of legal (i.e., the purpose of the contract cannot be illegal) offer or proposition in order to be considered valid.
XYZ Painters offers to paint the exterior of your house for $1,000.
Acceptance – The offer must be accepted. Any change to the offer is considered a counteroffer and must be accepted by the other party before deemed valid.
You accept XYZ Painters' offer to paint your house in exchange for $1,000.
Agreement – The parties come to an agreement, and there is mutual assent or a “meeting of the minds.” The essential terms of the contract must be determined and agreed upon upfront. Some terms of a contract may be determined at a later date.
XYZ Painters agrees to paint your house and you agree to pay XYZ Painters for their painting services.
Certainty of Terms – The terms of the contract must be clear. While some terms may remain vague, such as time and place – or perhaps even the shade of blue you want your house painted – the essential conditions of an agreement must be clear.
Consideration – This is a key component to a valid contract. Consideration is a benefit given to the party that makes the offer. To form a legitimate contract, there cannot solely be an agreement; there must also be consideration. In other words, each party must do something or provide something for the other party.
XYZ Painters promise to paint your house and you promise to pay them $1,000 for that service.
A valid contract can be written or verbal. These basic elements must be present to pass muster in a court of law. What to do when a contract dispute arises?
Unfortunately, despite any initial clarity amongst contracting parties, differences and disagreements arise, and contracting parties do not always see eye to eye.
Contract disputes may result in mediation or arbitration. Mediation is a process wherein the parties involved come to a compromise and attempt to work the problem out. Arbitration is another form of dispute resolution. An arbitrator is an independent third party that ‘resolves' the parties' dispute. In an attempt to avoid potential costly litigation, many business owners include mediation and arbitration clauses in their contracts.
The filing of a lawsuit is an option for some business contract disputes. The legal suit may seek monetary damages or specific performance from the other party.
It is essential to discuss your contract dispute issues with an experienced business attorney so that you are able to resolve the dispute and get back to business as usual.
Houston Business Litigation Attorneys
At the Law Office of Lori Elaine Laird, PLLC, we are experienced in all aspects of Texas Business Law and Transactions, including contract disputes.
We bring years of experience coupled with the drive to succeed to each and every case we handle, no matter the size of the business. Our attorneys work to resolve issues for individuals involved in contractual disputes, small, local businesses, and even large, international corporations. We are dedicated attorneys that focus on the individual needs of all our clients on a case-by-case basis.
If you would like to discuss or have questions regarding a contract dispute or any other Texas business law matter, contact the Law Office of Lori Elaine Laird today at 832-699-1966.
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