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Understanding Contracts: Their Importance and Role in Society | Contract Lawyer in Mooresville, NC

by | Jul 11, 2023 | Business Law

a close up picture of a paper that says contracts with the words "understanding contracts" Grimes Yeoman PLLC on the picture.
By L. Charles Grimes

People enter into contracts nearly every day without realizing it. Contracts are created and fulfilled from signing up for a new mobile phone plan to purchasing a house, buying a bag of groceries, and accepting a new job offer.

Contracts are integral to our lives and make our society operate as we know it. If we did not have courts enforcing all of our agreements that constitute contracts, life would be drastically different for all Americans.

But what exactly is a contract, and why are they so important? Let’s dive right into these questions.

Defining a Contract

At its core, a contract is an agreement between two or more parties that creates legal obligations to do or not do specific things. For a contract to be legally binding, it must satisfy a few fundamental elements:

  1. Clear Parties: It must be clear who (persons, corporations, etc.) agrees to do what.
  2. Offer and Acceptance: One party makes an offer, and the other accepts it.\
  3. Consideration: This refers to the exchange of something of value – money, a promise to perform a service, an agreement not to do something, or anything else of value.
  4. Mutual Consent: All parties involved must willingly understand and agree to the primary terms of the contract.
  5. Legality: The contract’s purpose must be legal and not against public policy.
    Contracts can be verbal or written, though written contracts are easier to enforce as they provide concrete evidence of the agreement terms.
The Importance of Contracts

Contracts play a pivotal role in our daily lives and the broader society for several reasons:

  1. Predictability and Certainty: Contracts clarify each party’s rights and obligations, creating predictability and certainty. This clear delineation helps prevent misunderstandings and disputes.
  2. Protection: Contracts offer all parties concerned protection. The affected party may enforce the contract in court and seek remedies, usually in damages if the other party fails to uphold their end of the bargain.
  3. Business Efficiency: Contracts speed up transactions, provide relationship structures, and make clear the conditions of services or goods.
  4. Tangible Evidence of the Agreement: If a disagreement occurs and goes to court, a written contract can be crucial evidence of what was agreed upon.
Contract Authority in Our Hands

Knowing the significance of contracts in our daily lives enables us to make wise decisions. Knowing what you agree to is essential when signing a lease, starting a career, or hiring a contractor for home improvements. Always read the small print and get legal counsel if you have questions about a contract’s provisions.

Contracts are more than just written or verbal commitments, to sum up. They are essential instruments that promote responsibility and trust while protecting individuals and enhancing predictability. Remember that contracts can help us navigate our personal and professional lives more safely and confidently.

Contracts: The Unseen Glue Holding Daily Life Together

Contracts aren’t typically presented as formal agreements chock full of legalese. Instead, they appear in various shapes and forms and smoothly integrate into our daily lives. Take these agreements, for instance, which we frequently take for granted:

  1. Restaurant Orders: You enter into a contract when you order food at a restaurant. You agree to pay the price listed on the menu for your chosen dishes, and in return, the restaurant agrees to serve you the food you’ve ordered.
  2. Concert Tickets: When you buy a ticket to a Taylor Swift concert, movie, or sporting event, you enter into a contract. You pay for the privilege of attending the event, and the venue or organizer agrees to host you as an attendee.
  3. Grocery Shopping: Even a simple act like buying groceries is a basic contract form. You pick out items you want and enter a contract with the store by paying for them at the checkout counter.
  4. Online Shopping: Every time you purchase online, you enter into a contract with the seller. When you click ‘buy’ or ‘checkout,’ you agree to the seller’s price, delivery method, and return policy.
  5. Social Media Platforms: When you create an account on platforms like Facebook, Instagram, or Twitter, you agree to their terms of service—another form of a contract. These can cover content ownership rights, data usage, and what behavior is acceptable on the platform.
  6. Laundry Pick-Up Tickets: You receive a pick-up ticket when you drop off your clothes at a dry cleaner. This ticket is more than just a receipt—it represents a contract. By accepting the ticket, you agree to the terms and conditions of their service, including prices, turnaround times, and liability limits for any damages.
  7. Software and App User Agreements: Ever clicked “I Accept” without reading the lengthy terms and conditions when installing a new software or app on your device? You’ve just entered into a contract. These agreements cover privacy, data use, and terms of use.\
  8. Plane, Train, or Bus Tickets: When you purchase a ticket for a bus, train, or plane, you enter into a contract with the transportation provider. The ticket represents an agreement where the provider will transport you to your chosen destination at a particular time. In return, you agree to adhere to their rules and regulations.
  9. Gym Memberships: You sign a contract when you join up for a gym membership. The services offered, terms of payment, cancellation procedures, and the gym’s obligation for any potential injuries are all described in this agreement.
  10. Employment Contracts: When beginning a new work, you must sign an employment contract with your company. This contract defines your duties, pay, working conditions, benefits, and termination clauses.
  11. Rental Agreements: A contract is necessary for renting anything, whether a car, a movie, or a vacation house. The rental firm lets you use the item for the agreed-upon time in exchange for a predetermined payment and timely return.
  12. Insurance policies: An insurance policy is a type of agreement. You consent to pay premiums; the insurance provider agrees to pay for potential expenses or losses.
  13. Medical Services: A contract is created whenever you see a doctor or dentist. The healthcare professional decides to carry out particular medical treatments, and you consent to pay for the services.
What type of contracts are most often litigated?

Contract disputes make up a large portion of civil litigation. While any contract can lead to litigation if one party fails to fulfill their obligations, some contracts are more frequently litigated than others due to the complexities involved, the high stakes, or the frequency of their use. Here are some contracts that are most often litigated, roughly in the order of what is generally seen in N.C. Superior Court:

  1. Business Contracts: This litigation category covers all types of broken business agreements, such as agreements between two firms where a breach of contract is allegedly present. Litigation involving shareholder agreements, partnership agreements, and purchase agreements is also included in this. The allocation of earnings, the direction of the company, and even violations of express or implied fiduciary obligations might be the subject of disagreements.
  2. Real Estate Contracts: Conflicts can occur over various issues, including property sales, leases, and property lines. These include contract violations, failure to disclose property flaws or disagreements over property boundaries.
  3. Service Contracts: These cover a wide range of business or personal services and can lead to litigation when there are disagreements about the service quality, the service’s timeliness, or the amount charged for the service.
  4. Construction Contracts: These can be very complicated, involving numerous parties and numerous issues and defenses, such as quality of work, time delays, and unpaid work.
  5. Employment Contracts: Disputes can arise over wrongful termination, wage and hour disputes, non-compete clauses, and confidentiality agreements.
  6. Consumer Contracts: These can involve disputes over consumer goods and services. Examples could include warranties, defective products, or deceptive trade practices.
  7. Insurance Contracts: Insurance policy disputes can involve disagreements over coverage amounts, what is covered, and the insurer’s obligation to defend or indemnify the insured.
  8. Intellectual Property Contracts involve agreements about using intellectual property, such as licenses or non-disclosure agreements. Disputes can arise over issues like infringement or misappropriation of intellectual property rights.
  9. Other Broken Agreements: The number and types of broken agreements other than in the above categories 1-8 are nearly infinite, and where the real money is on the line, businesses and individuals are willing to fight over it in court.

Remember, regardless of the type of contract, disputes often arise due to unclear language, discrepancies between the parties’ understandings of the contract, or one party’s failure to meet their contractual obligations causing them to come up with all sorts of excuses why they should not have to live up to their end of the bargain. If you have questions about contracts or need help creating one, reach out to us as contract attorneys in Mooresville, NC. We will help in any way we can!

If you are interested in learning more about business contracts, Cornell Law School has a great resource to read!

If you, someone you care about, or perhaps your family business has been ‘injured,’ know you have legal options. Feel free to contact our professional trial attorneys at Grimes Yeoman, PLLC. We can help you navigate this challenging time and fight for the justice you deserve. This blog post is intended for informational and educational purposes only and does not constitute legal advice. The situations and facts discussed illustrate what the author believes to be sound and wise thinking, and they may not represent the specifics of your case. You should always consult with a legal professional about your unique circumstances.
Again, the Grimes Yeoman PLLC attorneys are here to help. Call us today if you believe you or someone you care about has suffered harm or an injury. Knowing your rights and having peace of mind can be as important as anything else, regardless of whether it involves a personal or business injury. Help may be only a simple phone call away.