How your Chicago business can avoid a costly contract dispute

The mistake small business owners frequently make that could tie them up in a nasty contract dispute is entering into a contract without realizing it. This happens because people think of a contract as a formal, written document that must be signed by all parties in order to be legally enforceable.

The fact is that business contracts are entered into on a daily basis without there being anything in writing to prove their existence. Oral contracts are generally as enforceable as written ones provided they satisfy the requirements for a binding agreement

Contracts for builders and other business contracts are simply agreements made between two or more people or businesses supported by an exchange of consideration. Illinois courts refer to a meeting of the minds when discussing the agreement that must be present for there to be a binding contract between parties.

The mutual agreement necessary to form a binding contract can be a verbal one provided the parties understand what their agreement entails. An offer and acceptance becomes the basis for a binding agreement if the offer that is made matches the acceptance by the other party. For example, there is no meeting of the minds if a person responds to an offer to sell a car for $500 by agreeing to pay $300.

Written contracts may avoid breach of contract litigation because there is less likelihood of disagreement over the terms. Verbal agreements rely upon recollection and memory which could lead to a contract dispute.

Another reason for putting an agreement in writing is that the law requires it in certain instances. Generally, contracts for the purchase or sale of real property must be in writing in order to be legally enforceable.

It is a prudent practice for small business owners to consult with an attorney before entering into what might turn binding contracts. Obtaining legal advice about contracts from a Chicago business law and business attorney might help avoid contract disputes and litigation later on. 

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