You may have formed a contract even if you didn’t sign a written document. However, there does need to be “a meeting of the minds” – i.e. mutual agreement to the same contract terms.
A contract requires an “offer”, “acceptance” and “consideration”.
A bid is an offer. If you propose changes, your response is a counteroffer. An offer may be accepted at any time until the offer is expressly revoked or expires based on the terms specified in the offer. An offer cannot be revoked after it has been accepted.
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You may accept the offer via your signature on a written document, by oral acceptance, or by your conduct. For example, you accept an offer by making a down payment on the purchase price.
Consideration means that both sides of the deal give something of value, such as action for money. A promise by you to give your car to your niece is not enforceable because it is one-sided.
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Some types of contracts must be in writing to be enforced. Those include contracts dealing with real estate, contracts for the sale of goods worth more than $500, and contracts that cannot be performed within one year. Also, a promise to guaranty the debt of another must be in writing.
Even if not required, it is a good idea to have a written contract whenever a significant amount of money is involved. A written contract lessens the odds of a misunderstanding.
Contracts frequently specify which state’s laws will govern the enforcement of the contract. Most contracts are governed by the common law — i.e. judge-made law from past court decisions — of that state. Other contracts, especially involving the sale of goods, are governed by the Uniform Commercial Code (UCC), which governs the law of commerce. Most states, including Minnesota, have adopted the UCC in whole or in part, to govern the sale of goods in the relevant state.
It’s typically to your advantage for your attorney to draft the contract because you then have more control over the details of the contract terms. Alternatively, if the other side drafts the contract, your attorney should review the proposed terms. Often the side drafting the contract includes provisions that totally favor their side, but that they would be willing to strike or modify if opposition is raised.
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Disclaimer: This Blog is for informational purposes only and is not to be construed as legal advice. If you have questions, please seek the advice of an attorney. An attorney-client relationship is not formed by reading this Blog. If you are interested in Wittenburg Law’s representation of you, you must contact Wittenburg Law for a determination of whether your matter is one for which Wittenburg Law is willing and able to accept representation of you.
Bonnie Wittenburg, Wittenburg Law Office, PLLC, 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305 952-649-9771 www.bwittenburglaw.com bonnie@bwittenburglaw.com
