A contract is an agreement between two parties that is intended to be enforceable by law. In other words, a contract defines the obligations of the parties involved in a particular matter. Contracts help define the basic needs and guidelines of a business and can have major implications, therefore if you are signing a contract it is important to properly comprehend the articles of a contract and fully understand the repercussions they may have. Once you have read and understood the terms of the contract, only then should you agree upon it.
Many people fear that coming up with and signing a contract is a complex process. While this may be true to some extent, most of these fears are invalid. There are three components of a legal contract. The first step, offer, refers to a party verbally or textually communicating their proposal regarding a certain matter to the other party. An offer is usually negotiable and may or may not form the basis of the contract upon settlement. The second component, acceptance, refers to not only when a party accepts or rejects the offer presented to it but also to when it chooses to propose a counter offer in attempt to negotiate on the terms of the initial offer.
There are two ways an offer can be accepted. One consists of a non-binding promise, where the party agreeing to the offer does not necessarily have to stick by its decision of approving the proposal; this is called a bilateral contract. The other form is known as the unilateral contract where the offer is accepted and the terms of the offer are immediately acted upon. Consideration, the third component of a contract, is the legal promise of performing an act to which the concerning party has otherwise no obligation to do.
Once the basic elements of a contract are determined, it must be decided whether there are any defences that may question the validity of the contract. There are many factors that may affect the validity of a contract under the Texas Contract Law. In case, the subject matter of a contract is illegal or one of the two parties bound by the contract is underage, the contract is deemed invalid. A mistake on the part of both parties may invalidate a contract; however, a mistake on the part of one party may not result in the same consequence.
Furthermore, if one of the parties is forced to sign a contract, if a party deliberately misrepresents an issue regarding the contract of if the individual signing the contract is not a legal representative of the part bound by the contract the legal agreement will be cancelled.
Ending a contract is harder than signing a contract, which is why you should be careful before signing a contract. A valid contract can end in several ways. A contract may be valid for a certain time or project, consequently the expiration of either of the two may cause the contract to be cancelled. A contract may also be terminated because of a breach. This is when a party fails to fulfil its side of the bargain as described in the contract. The consequences of a breach vary from one situation to another.
Texas Contract Law sets clearly the legalities surrounding the signing and termination of a contract. If you are looking into signing a contract, make sure that you are satisfied with all its articles because a termination is easier said than done.