Making, Breaking and Litigating Contracts
Whether you need to create a contract, have questions about a contract you have or are considering signing, want to get out of a contract you have made, or need to pursue another party who you feel has broken a contract made with you, you should always consult with an attorney first.
Laws governing contracts vary from state to state. In Maine these laws include the Uniform Commercial Code, which governs a wide variety of contracts between merchants and consumers; and Statutes of Fraud, which governs the types of contracts that must be writtento be enforceable. However, there are general points of contractual law besides those written in these statutes that define and determine accountability in contracts of all kinds, from several-page employment contracts to the age-old “word and a handshake.”
These are questions that may be important to ask about a contract.
- Is it between two parties that may legally enter into a contract? For example, contract made with minors and adults with diminished mental capacities may be void.
- Is it express or implied? In some cases, a verbal “word and handshake” may be sufficient, while an alleged written contract may actually omit required wording to make it an enforceable contract.
- What promised action(s) is (are) the subject of the contract?
- Was the promise actually offered, or only mentioned as an intention?
- Was the promise accepted?
- What is the consideration, or value, that each party extends to the other as terms of the contract?
Contracts may be terminated by mutual agreement. One party may be excused from a contract if unforeseeable events make it impossible to perform. On the other hand, the other party may insist that the terms of the contract should be honored, and sue for breach of contract. If that party wins in court, they may be awarded nominal damages, to symbolize that wrong was done, even if the consequences were not significant.
Punitive damages, which are intended to punish malicious or willful conduct, are not usually awarded in contract cases. However, the court may order restitution, to restore the aggrieved party to the same economic position as when they entered into the contract; or payment of the cost of remedying a defect.
Attorneys’ fees and costs of recovery may be added to the damages or award, but in most cases this provision needs to be written into the original contract. Or it may be in the interest of one party, or both, to settle out of court.
What contracts do and do not say can make all the difference.
To put yourself in the most secure position when entering into a contract, consult with an attorney who does Contract or Transactional law. When a contract falls apart, consult with an attorney who handles Transactional law and Civil Litigation.