- What to Include in a California Business Contract
- September 30, 2016 | Author: James H. Gulseth
- Law Firm: JGPC Business & Corporate Law - Pleasanton Office
Obligations and Non-fulfillment Clauses are Only the Start
California business contracts are deceptively complex. The basic premise of a written contract is simple: The parties record the promises they made to one another so that each is aware of his or her responsibilities and rights. A contract that contains only this and no other essential terms is sure to lead to confusion and legal troubles. Ideally, a business contract will describe not only the obligations of each party but also what is to take place in the event one party or the other cannot or will not fulfill those obligations. Seeking an experienced California business contract attorney can help ensure any contract your business needs is sufficiently detailed to protect your business’s interests and to help keep its operations running smoothly.
Typical Contents of a Business Contract
The precise contents of a California business contract will depend on the parties to the contract and the purpose of the contract (amongst other circumstances). However, nearly every contract will contain provisions discussing:
- The identity of the parties: That is, who is being bound by the terms and conditions of the contract. All parties that are to be bound by the contract should be identified, even if their role is minimal or their obligations are few in number. The contract should also specify if the parties can delegate their obligations and/or assign their rights to other parties not specified in the contract and, if so, how this is to be accomplished.
- The obligations of each party: The tasks that each party is promising to undertake should be described in sufficient detail so that every party to the contract is clear as to what every other party’s obligation(s) are and when those obligations must be fulfilled. If a party’s obligation is dependent on some circumstance or occurrence, this should also be included in the contract.
- The rights of each party: When one party under the terms of the contract (called a breach), what actions may the other party take? The contract should indicate what the non-breaching party must do if he or she believes the other party has breached the contract, what monetary damages (or other types of damages) the non-breaching party can seek, and the avenues through which that compensation can be sought – whether through litigation, mediation, arbitration, or some other method.
- The signatures of each party: While signatures do not guarantee that a contract will be legally enforceable against a breaching party, having all parties sign a written contract does help prove to a court or other person that all parties to the contract reviewed the document and understood its terms.
This article was originally published on JGPC.com.