Written contracts are the foundation of any business or business transaction. In order to avoid litigation issues, drafting professional contracts is needed to define the terms of an agreement and hold each party involved responsible for their agreement.
Contract law is the foundation for these agreements, and contract law is supplemented in California by certain court decisions that become case law. An attorney who crafts contracts must be knowledgeable with both types of law.
Three different types of contracts are recognized in California- written, verbal, and implied. However, verbal and implied contracts are more difficult to prove in a court of law. Written contracts are almost always the best way to put an agreement in writing in order to prevent a breach of contract from any of the parties that are involved. Written contracts are typically used in real estate transactions, business transactions, trust agreements, and wills.
A written contract between two or more parties is comprised of an offer, an acceptance, and terms that are sufficient to specify the obligations of each party. This is the basis for an enforceable contract, and will prevent disputes due to the terms within the contract. An attorney with extensive experience in developing contracts will know that contract stipulations vary by the reason for the contract.
Contracts made in California include an implied covenant of good faith and fair dealing. Essentially, this means that every contract has these provisions. However, every written contract should include specific terms to prevent the otherwise inevitable controversies and complications that will arise if the language is vague. It is always a better plan to put provisions in writing that will leave no doubt about the meaning of good faith and fair dealing in the context of a contract.
Every contract should clearly state conduct, which will be considered to be a breach of contract and the damages the breaching party will be obligated to pay. Often, the inclusion of specific language about a breach will prevent a party from committing a breach unknowingly.
Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.