NBD & Contract Law

Last summer the band I am in OE-2-KB (“Old Enough-2-Know Better”) played an outdoor venue on the St. Johns River.  We were worried about rain, but that was not the problem.  We just happened to be there the one night a million blind mosquitoes hatched.  It was no big deal—or in text-speak “NBD”—except we could not continue playing.  The blind mosquitoes did not bite, but I had a page of my music stuck together with dead bug bodies.  We had bugs in our music, in our mouths, and in our instruments.  Similarly, in an agreement between friends, what seems like NBD, can become a bigger deal than expected. It is no big deal…until it is.   You do not go into business with someone you think you are going to have to sue, but misunderstanding is a quick remedy to friendship, especially with a spoken contract.  If you are doing business with someone, go ahead and write it down.  Then you both have a record to refer back to, and specified remedies if there is a breach of contract. Contracts take the mystery out of a situation.  They specify an action for every event.  In other words, they are made to […] Read More

Where Is Your Contractor?

So you decided you wanted a new driveway and you paid a guy with a pickup truck to put in some pavers.  Did you sign a written document stating what was going to be done and when and for how much?  What do you call a contractor without a contract?  Gone. As the name implies, a ‘contractor’ is someone closely associated with a ‘contract.’  ‘Contractor’ is not just a trendy name for a glorified handyman. Contracts take the mystery out of a situation.  They specify an action for every event.  In other words, they are made to be broken.  And they are made to be kept. A contract is going to end in one of three ways: Completed. Breached by one party. Breached by both parties. (If you answered ‘All of the Above,’ you are incorrect.)  Regardless of how the contract terminates, there are provisions for each of the scenarios. If you paid a contractor to build a sandcastle and he does not show up, what did you actually agree to?  Are you buying the goods or the service?  What was the time frame?  It all comes back to the contract…if you have no written contract, then you proceed at […] Read More

Ink & Contracts

Not all contracts have to be written.  A contract requires an offer, acceptance, consideration, and legality.  If the existence of these elements can be proved (as by secondary documents such as emails or checks) then there is a contract…though it may be more difficult (or impossible) to determine what all the terms of that contract are (or were). According to the Statute of Frauds, certain contracts must be in writing.  Those include:  real estate contracts, any contract that cannot be performed within one year, a lease of more than a year, if you take someone else’s debt, and for a sale of goods for more than $500. Just because you may be in a situation that does not require a written contract, you may want to have one anyway.  If you are shooting the breeze about doing business together with someone, go ahead and write it down.  Then you both have a record to refer back to, and specified remedies if there is a breach of contract. Furthermore, if you do not understand the terms of a contract, find an attorney who does, and who can explain them to you.  Do not just rely on the other party’s lawyer, but […] Read More

Birds & Bees of Contract Law

Burt Shavitz and Roxanne Quimbly went into beeswax together, and eventually she bought out Burt for about $130,000.  Quimbly then sold the business for $913 million to Clorox.  Both sales had all four components of a contract:  offer, acceptance, consideration, and legality—only Quimbly made quite a bit more.  Burt, however, continues to lend his image as the logo for Burt’s Bees. It takes two parties to make a contract, and there are three possible offspring: 1. Completed Contract. 2. Breach by one party. 3. Breach by both parties. You do not go into business with someone you think you are going to have to sue (or who is going to take the company you built and sell it for millions more than you made).  Keep your friends close and your friends-you-have-contracts-with even closer.  Contracts take the mystery out of a situation by giving a specified action for every event.  Not only do contracts provide a record to refer to, they also provide remedies if there is a breach of contract. Read More

What Makes a Contract?

A contract requires four things: 1. Offer 2. Acceptance 3. Consideration 4. Legality (do not make a contract to do something illegal) A lot of spoken contracts are valid; however, in Florida certain contacts have to be written down, including: * Real Estate * Marriage * Contracts that cannot be fulfilled in on year * Sales over $500 The problems with spoken contracts are knowledge of the terms and proof that it exists.  In some cases, if you have five documents of communication about the agreement, then you can find a written contract within them.  However, though you may be able thus to prove that a deal exists, you may not know what the terms are. You do not go into business with someone you think you are going to have to sue, but misunderstanding is a quick remedy to friendship, especially with a spoken contract.  If you are doing business with someone, go ahead and write it down.  Then you both have a record to refer back to, and specified remedies if there is a breach of contract. Keep your friends close and your friends-you-have-contracts-with even closer! Read More

Once Upon a Contract

Once upon a real estate deal the Big Bad Wolf was going to put a $10,000 deposit on the Three Bears’ house…or so they thought.  The Wolf, however, only made out the check for $1,000.  When the Wolf decided he would rather have the Three Pigs’ brick estate, the Bears wanted the $9,000 balance of the deposit—question is, was there a contract for the deposit? In most cases you want a contract with its four elements:  offer, acceptance, consideration, and legality.  The contract states what the deal is supposed to be and what happens if the deal does not turn out that way (or at all). Upon closer inspection, the Three Bears realized that though they had asked for $10,000 in earnest money, the Wolf had never initialed, and thus had not accepted their offer.  In reality, his counter is a rejection of the first offer.  What he is really saying is, “No, but I make this offer instead.”  Another reality is the professional risk.  Where professionals are involved, professional liability is at stake, and in this case, a real estate agent may have a problem. Beware of Wolves writing small checks and of real estate agents negligent in their […] Read More

Contract Breakdown

A contract is going to end in one of three ways: 1. Completed. 2. Breached by one party. 3. Breached by both parties. (If you answered ‘All of the Above,’ you are incorrect.)  Regardless of how the contract terminates, there are provisions for each of the scenarios. Contracts take the mystery out of a situation.  They specify an action for every event.  In other words, they are made to be broken. The difference between a psychosis and a neurosis is that someone with a neurosis builds sandcastles in the air…the psychotic moves in. What do you call your contractor without a contract?  Gone. If you paid a contractor to build a sandcastle and he does not show up, what did you actually agree to?  Are you buying the goods or the service?  What was the time frame?  It all comes back to the contract…if you have no written contract, then you proceed at your own peril. Do NOT pay money without a contract.   Read More

When ‘Should’ Does Not Happen

A contract defines what should happen, but also gives what happens if ‘should’ does not.  Contracts are written with remedies for breach of contract.  If you have done your due diligence ahead of time, then you know how to terminate the contract without breach, and what the consequences are if it is breached. With certain deals, it might behoove you to breach the contract.  You might be better off to back out rather than complete it, depending on the circumstances.  “Breach” is not always a bad word. Know what the terms are if you back out when you go in.  If you are unsure of the outcome in various scenarios, consult competent legal counsel.  As an attorney, I would rather get paid for conflict NOT to happen later.   Read More

Surprises in Contracts

Sometimes surprises are good, but not usually in contracts.  A contract states what the deal is AND what happens if that deal does not go through. There are three possible endings to every contract: 1. The contract is completed. 2. The contract is breached by one party. 3. The contract is breached by both parties. Sometimes it makes more dollars and sense to breach a contract than to go through with it. If you do not understand the deal, or if you are unsure of the alternative endings, have an attorney review the contract with you so you know what you are getting into (or out of) before you sign.  Legal counsel is generally less expensive in preventative measures rather than after a conflict has happened.  Avoid surprises in contracts and legal fees. Read More

Breach Delivery & Contracts

Contracts are made to be broken.  In some cases, you are better off to go through with the contract than to back out, but not always, depending on the circumstances.  “Breach” is not necessarily a bad word. Contracts are terminated in three ways: 1. They are completed. 2. They are breached by one party. 3. They are breached by both parties. If you have done your due diligence ahead of time, then you know how to terminate the contract without breach, and what the consequences are if it is breached.  The contract specifies the remedies to breach of contract. Know what the terms are if you back out when you go in.  If you are unsure of the results in the various scenarios, consult competent legal counsel.  As an attorney, I would rather get paid for conflict NOT to happen later. Furthermore, if you are wondering who reads the fine print of a contract, the answer is that lawyers always do. Read More