Contracts are an essential part of doing business in North Carolina. These documents must contain certain elements to be considered legally binding, as well as to mitigate potential disputes that may arise. The Balance explains what makes a contract legally binding, as well as what could happen if the terms of a contract aren’t adhered to.
In general, a valid contract will feature five distinct qualities. A contract must have a purpose, and this purpose must be considered legal, i.e. a contract used to carry out a crime would not be enforceable. Next, all involved parties must have reached some kind of agreement and all parties must give someone up in exchange for something else. As an example, when you pay a person to perform renovations at your home, you’re providing money in exchange for a professional service.
The fourth consideration involves competency. This means all parties must be of sound mind and legal age to enter into a binding agreement. Finally, the contract must be signed freely and not as a result of fraud, coercion, or any other criminal act. Any errors or inaccuracies must also be addressed before signing to ensure a contract is legally binding.
A breach of contract also causes legal issues. Breaches occur when one or both parties fail to adhere to previously agreed upon terms, and if a breach caused you to lose money you can sue for damages. You can also request that the contract is dismissed if you feel you were tricked into agreeing to its terms. The court may also request that the other party carry out the duties of the contract as specified in the document. Because contract law can be complex, it’s recommended that you discuss the matter with an attorney.