Do you have questions about Nebraska contracts law?

Thompson Law Office is here to help.  Learn more about our business law practice here.

What is a contract?

A contract is a legally binding agreement between two or more parties.

Because contracts often reflect agreements for the exchange of goods or services, contracts are the foundation of our economy. If you own or manage a business you deal with contracts daily. Contracts govern relationships with customers, employees, vendors, landlords, insurers, bankers, and many others.

Contracts also permeate our personal lives. When you hire a plumber you enter into a contract. When you take a taxi you enter into a contract. You may enter into many contracts each day without realizing it.

Because contracts are so pervasive in our business and personal lives, it is important to understand the basics of contracts law and the role a business attorney can play in helping you negotiate and draft contracts. It’s also important to know how an attorney can assist you when a contract dispute arises.

contracts lawWhat does it mean for a contract to be legally binding?

A contract is a unique type of agreement because it is legally binding. When an agreement is legally binding, a court may enforce it.

When one party breaches a legally binding contract, the other party is entitled to monetary damages resulting from the breach. An award of monetary damages becomes a judgment, and the judgment creditor can enforce the judgment through the judicial process.

In some cases, where monetary damages cannot make the aggrieved party whole, a court may even order the breaching party to perform his specific obligations under the contract; this is called specific performance. For example, where a seller contracts to sell a specific parcel of real estate and then refuses to convey title, the court might order the seller to convey title to the property.

What are the requirements for a legally binding contract?

Contracts law requires four things for Nebraska courts to consider a legally binding contract.

First, there must be consideration. Each party must provide something of value to the other party. The consideration may be a promise to pay or perform some other act in the future. Both parties must provide consideration; if only one party provides consideration, the law considers that a gift and there is no binding contract.

Second, there must be a clear offer and acceptance. The parties must agree on all the essential terms of the contract. That is, there must be a “meeting of the minds.”

Third, the contract must be for a lawful purpose. A contract with an illegal purpose is not enforceable. For example, a contract that would violate a law of the United States would be unenforceable.

Fourth, the parties must have capacity to contract under Nebraska law. For instance, a contract entered into by a minor may not be enforceable.

There may be other statutory requirements for some contracts to be enforceable. For instance, some Nebraska statutes may require there by specific language in certain consumer contracts. Moreover, some contracts must be in writing.

Must a contract be in writing to be legally binding?

Not necessarily. Many contracts are oral.

Some contracts, such as those for the sale of real estate, must be in writing; however, even when not reduced to writing such contracts may still be enforceable if the parties have acted in reliance upon their oral agreement. You should consult with an attorney if you have questions about the enforceability of an oral agreement.

What makes a good written contract?

The function of a written contract is to clearly set forth all the rights and obligations of the parties. Absolute certainty is the key. Where there is certainty there can be no misunderstandings. And where there are no misunderstandings, disputes are less likely. Therefore, a good contract should:

  1. Clearly define its terms
  2. Explain all the rights and obligations of the parties
  3. Eliminate ambiguities
  4. Minimize “Legalese”
  5. Plan for “what if” contingencies
  6. Avoid repetition; and
  7. Be consistent in form and substance

What is your philosophy on drafting contracts?

Contract lawyers understand that contracts law requires precision, and it is not possible (or wise) to condense every legal document down to a few pages. The point is that too many lawyers fail to recognize that the quality of a legal document does not necessarily increase in proportion to its length. Many contracts we review are filled with archaic terms, redundancies, awkward phrases, ambiguities, and worthless boilerplate. This increases the likelihood of misunderstandings and decreases the productivity of everyone associated with the transaction.

We also know that good drafting takes time, and clients may not want to incur that expense when a template or form has met their needs for years. However, an ambiguity in a contract, or an omission, may go unnoticed for years and then, when the circumstances are right or the law has changed, suddenly lead to a costly legal dispute that could have easily been avoided by hiring qualified counsel.

When should I hire a lawyer for advice on a contract issue?

The best time to hire a lawyer is before there is ever any dispute. This means seeking the lawyer’s help during the negotiation and drafting stages. Involving a lawyer in these early stages can help you identify all issues and address them appropriately in the contract document. A good lawyer may be able to help you identify issues you had not anticipated. In this stage the lawyer’s function is to help you build the contract that you want – a contract that will be clear and complete.

It is a mistake to wait to hire a business lawyer until after you have already signed the contract and a dispute has arisen. Nevertheless, if a dispute arises after you have already signed a contract, you should still promptly consult a qualified business law attorney to assist you in the dispute resolution stage. A qualified Nebraska contracts lawyer may be able to advocate for your position on a contract issue or help to re-negotiate a disputed provision. He or she may be able to help achieve a satisfactory compromise that will be cheaper than litigation.

When a dispute cannot be resolved, litigation may result. At this stage it is vital that you have a qualified attorney represent you. A lawyer with knowledge of contract law can help guide you through the litigation process and assist you in achieving the best possible outcome.

If you have more questions about contracts law in Nebraska, contact an Omaha business attorney at Thompson Law Office at 402-934-0198 or toll-free 1-888-934-0198, or you may schedule a consultation online right now here.

 

 

 

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