A contract is a legally enforceable agreement between two or more parties that creates mutual obligations. That sounds simple, yet disagreements regarding contracts arise on a daily basis, requiring legal representation, negotiations, and court intervention.
There are often disagreements about whether a contract was actually formed or not, even when an agreement was put into writing. There are disagreements regarding what each person truly meant by the spoken or written words of the agreement. Issues arise when one or both parties feel the other did not perform their obligations as they were supposed. While many contracts are formed and executed without incident, others can lead to significant and costly disagreements. If you are part of a contract dispute right now, the best thing to do is contact a contract attorney from Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA as soon as possible.
We are available at (419) 871-9017 or through our online form, and we offer free consultations.
Ohio Contract Law
Laws regarding contract formation and validity are predominantly state-based, yet they are mostly consistent across the U.S. What is a valid contract in Ohio is likely to be a valid contract in Washington or Florida, though this is not guaranteed. The common law surrounding contracts, which has been established by courts throughout U.S. history, is collected and explained in the Second Restatement of the Law Contracts. Published by the American Law Institute, the Restatement of Contracts is the all-encompassing guide to modern contract law in the U.S.
Ohio’s contact law largely relies on common law principles. However, there are exceptions. Contracts for goods are controlled by a number of statutes, including Uniform Commercial Code’s Statute of Frauds. If your contract matter relates to goods instead of services, you should speak with a contract lawyer to discuss the federal and Ohio laws that may apply to your agreement. If your agreement is between a business and a consumer, whichever party you are, other Ohio laws may apply.
Elements of a Contract
Every contract must have certain elements to be valid:
The offer is a promise to do something or to specifically not do something (also known as refraining or a forbearance from taking action) in exchange for something else. A common and simple example: Adam offers to paint Bill’s house in exchange for $500. Bill can either deny the offer by saying “no” (or making a counter offer) or he can accept it by saying “yes, go head and paint my house.”
Consideration is the more nuanced element of a contract. Each party of the contract must provide something of value. Another way courts describe this concept is that each party must suffer a legal detriment. The most basic method of consideration is money, like in the example above. Adam’s consideration is the promise to do something he otherwise would not have to do while Bill’s consideration is payment of $500. Clearly, the “something of value” is not always money. It may be a promise to perform some action, refraining from certain conduct, or relinquishing a legal right to do something.
Finally, a contract requires that all parties involved are bound to perform under that contract. There must be a mutual obligation. Under our example, once the contract is finalized, Adam must paint Bill’s house and Bill must pay Adam $500. One person cannot be forced to act under a contract while another party does nothing or gives up nothing.
If you are dealing with a dispute that you believe is based on an invalid contract, call one of our contract attorneys to review the contract agreement right away.
Written v. Verbal Contracts
At Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA, we receive a lot of questions regarding what constitutes a valid oral contract versus a written contract. There are circumstances in which an agreement must be in writing to be enforceable, such as real estate contracts and pre-nuptial agreements. In most situations, though, two or more people can make a valid and legally enforceable oral agreement.
Oral contracts do not require special elements to be valid and enforceable. A verbal contract simply must have all of the necessary elements, including offer, acceptance, consideration, and mutual obligation. Adam and Bill, in our example above, can create an enforceable contract without writing down the terms.
The reason you have probably heard inconsistencies about oral contracts and worry about their enforceability is because they can be difficult to prove in court. Many oral contracts lead to disputes regarding who said what and when. They are not in writing, which makes it inherently difficult to establish precise terms. While enforcing an oral contract in court can be difficult, it is not impossible. Our contract attorneys can review your situation and advise you on the strength of your case.
Express v. Implied Contracts
When you hear about express and implied contracts, this is really a discussion regarding the formality of the situation. An express contract typically comes from a more formal situation. There may have been a written offer, counter offers, and acceptance. Businesses usually have written, express contracts when they work together. Or certain situations call for express contracts, such as buying and selling a house.
An implied contract usually arises out of informal and casual situations. Consumers often participate in implied contracts. They make offers and accept them without formal language all the time. For instance, people drop and crack their phone screens. There is no need to buy a new phone, they just need the screen repaired. When a person takes their cracked phone to a repair shop and the employee behind the counter says “We can fix that today for $50” and the person hands over their phone, both become party to a contract.
However, like oral contracts, implied contracts can get tricky when there is a dispute. When you believe you are part of an implied contract that another party has breached, or another person claims there is a contract and you disagree, you should reach out to a contract lawyer.
Common Types of Contracts
At Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA, we handle all types of contract matters, from negotiation and drafting of a contract to dispute resolution. We are well versed in Ohio contract law and common law principles, and we are here to help you conduct a transaction, enforce a contract, or pursue damages for a breach.
Our attorneys have decades of experience with transactional matters and can represent you in regard to:
We regularly handle partnership and member agreements, franchise agreements, mergers and acquisitions, stock purchase agreements, sales of goods, purchase orders, security agreements, equipment leases, and more. Whether you are starting a new business or have been a business owner for years, you need an experienced transactional attorney on hand. We are here to negotiate and draft new agreements, review old contracts when necessary, negotiate with other parties, and to represent you in court when there is a dispute.
In addition to our business contract experience, we also represent employees and employers in regard to employment agreements. We have experience with salaried employment contracts, at-will employment contracts, independent contract agreements, non-compete agreements, confidentiality agreements, non-disclosure agreements, employment separation agreements, and union contracts.
Real Estate Contracts
Real estate transactions appear routine from the outside, yet are quite intricate when you look at them up close. Whether you are a buyer or seller in a residential or commercial matter, you should have a contract lawyer on your side. We can help you with residential purchase contracts, purchase agreements, land contracts, contracts for deeds, construction contracts, subcontractor agreements, lease agreements, landlord-tenant law, bills of sale, and more.
Powers of Attorney
A power of attorney is a legal agreement by which you give power to another person to make certain legal, financial, or medical decisions for you based on a certain event, such as your becoming incapacitated. Power of attorney can also be granted in other types of situations, such as when you wish for a real estate broker to place or accept offers on a house on your behalf. You enter into a contract through which another person, your agent, has the power to enter you into another contract. If you have questions regarding creating a power of attorney, or whether you are part of such a relationship through an implied agreement, call us right away.
Modifying a Contract
Contract negotiations are common. Parties often modify contracts before agreeing to final terms or signing the formal document. Take a residential purchase agreement as an example. One party may supply an initial draft contract. The other party will review the elements of the agreement and respond with necessary or suggested changes. Parties may go back and forth regarding what the buyer and seller must do before agreeing on fair terms and closing. If you are taking part in negotiations, you should contact a contract attorney for assistance.
Once a contract is finalized, which typically means the contract is signed, the parties are required to stick to the terms of the agreement. However, contracts can be modified when both parties agree to do so. One party cannot change the agreement without the other’s consent (unless there is a specific provision within the contract that allows that party to do so).
Common contract modifications include:
- Shortening or extending the duration.
- Adjusting the quantity of goods.
- Expanding the scope.
- Adjusting the payment term.
Many contracts dictate how they can be modified. When an agreement does not dictate the form of modifications, parties are free to modify the contract in whatever way they all agree. If parties cannot come to an agreement in regard to a modification, the choices are to complete the contract as is or to all agree to walk away from the contract.
If you are dealing with a modification issue, our contract lawyers at Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA are here to help.
Breach of Contract
A breach of contract occurs when one or multiple parties do not perform as they should based on the agreement. In some situations, the breach of contract is total and obvious. For instance, Adam painted Bill’s house and then Bill refused to pay. However, in many cases, a breach of contract is more subtle. Contracts often require each party to take multiple steps or refrain from multiple actions. It may be that a party performs in one way, yet not another.
When a party does not fully perform their end of the bargain, the question then becomes whether the other party can fully enforce the agreement. The answer is that it depends. If the other party has substantially performed under the contract, meaning they have completed all or most of what they were required to do, then yes, they can likely enforce the contract. However, if that other party has only partially performed their tasks, then they may not be able to force the completion of the agreement.
It also depends on whether the breach was material to the contract or considered minor. Based on our example, a material breach may occur if Adam paints only the front side of Bill’s house and then for months, never returns to finish the job. A minor breach may be that Adam did not paint the gutters along with the siding. For minor breaches, you may not have a legal claim. However, it can be difficult to tell whether a breach is material or minor.
Another important factor within breach of contract claims is whether the party who did not perform had a lawful excuse, such as impossibility. For example, if Bill’s house was destroyed in a tornado, then it is impossible for Adam to paint it.
Breach of contact claims are common and they can be extremely complex. If you fulfilled your end of the bargain and now the other party refuses to complete theirs, call a contract lawyer today to discuss your rights and legal options.
How to Enforce a Contract
If you are in a situation in which another party has not completed their part of a contract and is refusing to do so, or refuses to communicate with you, call us immediately. Whether or not you can seek to enforce a contract depends on multiple factors, including whether or not you have a valid agreement, whether the other party has a lawful excuse not to perform, and whether you have upheld your end of the bargain.
If you have the right to enforce a contract, we can work with you and the other party to see it fulfilled. If the other party continues to refuse to perform, causing you financial damages, then we will explain your right to file a claim in court. You may be able to file a lawsuit based on a breach of contract, and you may ask the court to order the other party to perform, which is now allowed in all circumstances, or to compensate you for your financial losses.