Contract Law, What Is It Exactly? 

To start off, the foundation of this area of law is contracts. A contract is a legal agreement between parties that establishes mutual obligations for individuals and businesses. You can protect your interests by utilizing a contract. Contracts specify and delineate terms for transactional engagement. The contract states the consequences of breaking the agreement. Essentially, contracts are immensely beneficial to business operations. 

Contract law refers to the laws that regulate contract creation and enforcement. It covers contract formation. A document must meet certain requirements to become a contract. This legal realm also concerns eligibility to enter into a contract. Not to mention consequences of contract violation and what contracts may require from signatories, among other things. 

Offer, acceptance, and consideration are the three necessary components of a contract. One party offers something to another party. From the offerer to the offeree. As such, the contract includes a declaration of intent whether goods or services. It describes who is eligible to accept the contract. And, states the offeree’s information and lays out the terms of the agreement. Acceptance of the offer must be worked into the contract, as words, actions, or performance. A written statement is the most common of those three. Simply, the statement says that the parties agree to enter into a contract and stick to the terms. Meanwhile, the consideration is the value of the proposition, such as goods or services. 

Protect Your Company With Contract Law

Business Contracts Lawyer.

In terms of business, contract law is crucial for ensuring the protection of your company. They also help preserve functioning relationships with other business owners and operators. Ideally, if there is a fundamental understanding of a valid and legally binding contract and what happens if a violation occurs, the agreement may allow you to diminish the likelihood of a legal conflict. Contracts are a tool for managing risk and maintaining beneficial partnerships in business. We know firsthand that contract law is not the most straightforward. It stands to reason, the more agreements you have, the more complicated it can become. 

Stockman & Poropat, PLLC handles every aspect of contract law for our clients, including drafting, review, and negotiation. We have several areas of focus. Business operating agreement and/or by-laws, privacy policy, terms of service, and service agreements. A discussion of each will take place below.

Operating Agreement and By-Laws

An operating agreement refers to the operating procedures for an LLC. While by-laws are relevant to corporations and are their governing documents. If you have formed an LLC, you will have articles of organization. If you formed a corporation, you will have the articles of incorporation. 

Creating an operating agreement for an LLC allows owners or members to avoid misunderstandings and bolsters the entity’s limited liability protection. This can be complex or simple, based on the desires of the members, and serves to illuminate the ownership percentage of each member, their obligations and rights, how voting is split, loss allocation, profit distribution, details of management, and financial obligations. Are you a single-member LLC? An operating agreement can be created for that, too, and functions to show that legally your company should be considered an LLC and not a sole proprietorship. 

Corporate by-laws map out the manner by which the board of directors will govern the corporation. Similar to what was stated above, based on the amount of shareholders, these by-laws can be complex or simple. Once the by-laws are executed, they may be amended or changed if a vote by the shareholders supports that decision. Unlike an operating agreement, members of the board of directors are not named in the by-laws. These by-laws include the name of the corporation, the corporation’s contact information, director and shareholder meeting procedures, the quantity of officers and directors, the type of shares issued by the corporation, record keeping procedures, and by-law changes procedures. 

Our team can work directly with you to craft these internal documents, no matter the type of your business entity, so you may rest assured that your operations will run as smoothly as possible. We are the business contracts lawyer for you!

Privacy Policy

Privacy policies explain how a business will use any collected personal information from consumers on a mobile app or website. You cannot simply copy and paste a form! The policy should be uniquely tailored for your business and consistently updated. They are legal documents that protect you and the consumer. If you do not have an updated and appropriately written privacy policy, you could face serious legal issues. Moreover, this is very important if your business has customers or users who reside in California or the European Union, due to the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR), respectively. 

Our firm knows how to draft, review, and update privacy policies that protect both you are your customers. We will help you explain the type of data you are collecting, the reason for it, and how it will be used. Email addresses, credit card numbers, and names are all considered personal information. Regardless of how you collect that information, a policy is required to tell people what you are doing with the data and where it is stored. Avoid a security breach and a situation involving the Federal Trade Commission by creating a solid privacy policy. 

Business Contracts Lawyer.

Terms of Service

Terms of service (ToS) refers to the regulations of the software you provide to your users. If your business provides software or a web-based service, the user must agree to the ToS prior to using it. The ToS is the contract between your business and your consumers, and having one on your website helps keep abusive actions at bay. It also protects your ownership of the content on your site, as well as any logos and the design of the website. You will want to outline Intellectual Property clauses in the ToS so that it is clear that any unauthorized use of your content is considered copyright infringement. 

Service Agreements

Standard service agreements are the contract between your business and your clients. These contracts establish each party’s legal rights and obligations, and state what services or goods you are providing, pricing, shipment details, if any warranties or refunds are included, and the limitation of your liability. While service agreements vary between two parties, the existence of a standardized form allows you to include whatever legal provisions you would like your company to have in place for each transaction. The service agreement serves as a document appropriate for the majority of your customer relationships. It permits you to avoid future disputes by including specific descriptions of what your business offers the customer. Service agreements also save time and money! 

Usually, we include details like the duration of the agreement, the payment terms, dispute resolution details, liability, modifications or amendments, intellectual property rights, and termination details.

Contact us today to discuss whether a business contracts lawyer will benefit your operation. If you found this article helpful be sure to check out our previous publication on Business Law.

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