It’s best to get any important agreement in writing. Even among friends and family that go into business together, a contract can save a lot of frustration, anger and even unease. The idea is that by writing it down on paper (make sure there is a hard copy), the terms of the agreement are there in front of the parties or partners or seller and buyer.
What is a contract?
A contract is an agreement between two or more parties that creates an obligation and is legally enforceable. In general terms, it is an act of mutual agreement between all the parties involved about a specific subject. The parties or individuals must be mentally capable for the contract to be binding. Contracts signed as a minor typically become void once you become an adult.
Of course we enter into contracts all the time, whether we are buying a house, renting a car or using a credit card. People can fashion their own contracts or use a lawyer to draw one up. These can be governed by Uniform Commercial Code (UCC), which is a consistent set of rules tied to commerce with tangible objects and goods.
Common law contracts, on the other hand, are governed by the state’s common law – this is a tradition or precedent based on court decisions made over the years by a judge. Common law generally pertains to real estate, insurance, employment, services and intangible assets. There is no common law marriage in Pennsylvania.
Can a contract be cancelled?
There may be a period where a party can walk away, but generally not, unless the non-breaching party agrees to cancel the contract. The point of entering into a contract is to negotiate something (perhaps to your to your advantage) and then get the other side to agree to it. There are exceptions in instances of door to door sales, athletic club memberships, contracts that involve a mortgage or lien on your home, or credit repair clinics and sometimes loan brokers. In this case there is usually a period of five or seven days to cancel a contract.
While unfair advantage is not grounds for dissolving or breaching the contract, there can be grounds if one party can prove that the other breached their contract (i.e. failed to fulfill their end of the bargain) and thus cancels the contract. To counter this, the other or both parties may respond by claiming that they wish to have the terms of the contract enforced. This can be mediated, taken to small claims court or tried as a lawsuit formally in a court of law.
Get it in writing
Each contract is unique to the circumstances it was created under. While the information given here general, it’s best to consult an attorney versed in contract law if someone has questions about a something they agreed to in writing or are considering drawing up or signing something important.