Ciyou & Dixon, P.C. attorneys routinely receive questions about contracts. One we receive from our clients and perspective clients is what needs to be in a contract and why. The specifics of any contact are always difficult to determine and hard to draft.
Nevertheless, there are three (3) broad areas every informed person should generally understand to interact with all of the contracts faced in routine daily life. With this it is possible to identify when legal counsel may be necessary in any contractual matter.
The first distinction is between goods and services. To facilitate interstate commerce in goods (i.e., things), the Uniform Commercial Code applies throughout the states; it is a body of statutory contract law that attempts to make contractual sale terms for goods uniform across all the states. Most individuals and consumers engage in the contracts for services.
Secondly, where services are the subject of the business agreement, what the service is and the specifics of how it is to be performed make up the most important business contract terms.
These may be very simple. For example, a lawn care service contract to spray for weeds and fertilize a person’s yard may be standard: weed and fertilize every other week for months X through Y for Z amount.
Additional services, such as that occur on a one-time basis or infrequently may need to be spelled out in more detail and in terms of cost. Adding a tree to the yard to replace one struck by lightning is a good example.
Is the tree to be a sapling or a mature tree of the same type and size? These may involve vast differences in costs and may need more detail set forth in a contract than routine services.
With the fee for the services specified with necessary clarity, the third provision comes into play. The provisions for a breach of the contract and those for foreseeable and unforeseeable contingencies are necessary to determine a remedy.
Common considerations for breach provisions include recovery of contract attorney’s fees and where the suit will be brought, such as what state it will be filed in and the county of venue. More and more breach terms include the requirement to go to alternative dispute resolution to attempt to solve the dispute. As a general rule, this is faster and less expensive.
Some of the more complicated terms are those that relate to foreseeable and unforeseeable circumstances that might occur during the performance of the service. Acts of God, war, and terrorism clauses are common ones. In this case, does the business contract apply at all?
If the service or duty is relieved by an acts of God, war, or terrorism, this should be clear so either or both parties can then insure against this contingency with insurance. Contracts are powerful tools that govern almost everything in the current world. Rarely are the terms thereof in question, but where they are it is critical to understand what provisions control breach of contract and what is excluded from coverage.
Some business contracts, such as home remodeler’s contracts, require specific provisions required by Statue.
Ciyou & Dixon, P.C. business contract attorneys are involved in virtually every aspect of business contract law, from contract negotiating and drafting the documents to enforcement of anticipated or actual breaches.