What is Required for a Contract to be Valid?

San Diego business attorneys at Gehres Law Group, P.C. can provide help in negotiating and drafting a contract that is legally valid. When you enter into a contract, one of your principal goals is to protect your legal interests. Contracts can facilitate many objectives, from guaranteeing on-time delivery of goods based on a promise from a supplier, to guaranteeing payment for services rendered. Because contracts are so important to protect your interests, it is vital that all contracts be clear and concise, and the terms enforceable under applicable law. 

There are specific requirements under the laws in the state of California which must be met for a contract to be legally valid. You should talk with an attorney to understand what is required for your contract to be enforceable so you can ensure that the contract you create is a valid one that provides the protections you expect.

Requirements for the Creation of an Enforceable Contract

California Civil Jury Instructions section 302 explain what parties must prove in order to demonstrate that a valid contract was created. According to these jury instructions, to prove the existence of a contract, it is necessary to show:

• That the terms of the contract were sufficiently clear so that each party could understand the requirements imposed by the contract. This does not mean that formal legal language cannot be used, and it does not absolve the parties to the contract of their obligation to read the contract and to perform their due diligence before signing it. This requirement, instead, simply makes it apparent that a contract will be unenforceable, or sections of it may be unenforceable, if it is so vague that the parties to the contract – or a judge or jury in a breach of contract dispute – cannot understand what the contract actually requires.
• That the parties exchanged consideration. This means that each party must have given something of value. Mutual promises (a promise to paint a house in exchange for a promise of payment) can be considered valid consideration. However, it is not valid consideration if one or both parties to the contract promise to do something they are otherwise obligated to do. For example, if Tim promises to give his nephew Pete $100 if Pete does not drink alcoholic beverages until Pete turns 21, this is not a legally valid and enforceable contractual agreement because Pete is legally required to abstain from drinking alcoholic beverages under California law, so he has given nothing of value in exchange for Tim’s promise of $100.
• That the parties agreed to the terms of the contract. The parties must have acquiesced to be bound by contract terms without any fraud or coercion. If one party intentionally misled the other in order to convince the other party to sign the contract, then the contract may be invalided, in whole or in part.

In addition to these general requirements, the parties to a contract must have the capacity to enter into a legally binding contract, which means neither party can be a minor and both parties must be of sound mind. The contract also cannot be void as against public policy or otherwise unlawful or it will not be enforced. For example, if Molly and Bailey enter into a contract in which Molly promises to pay Bailey $1,000 if Bailey kills Molly’s cousin, the contract is obviously not going to be a valid one. Similarly, if one of the parties has been diagnosed with dementia, their contract may not be enforced.

Getting Help from San Diego Business Attorneys

The experienced and trusted San Diego business attorneys at Gehres Law Group, P.C. can provide help with reviewing a contract you are considering signing or can assist with negotiating and drafting a contract. We can also provide representation if a dispute over the validity of a contract arises, if you have been damaged by non-performance of a contract, or if you are being accused of breaching a contract.

Whatever legal issues arise in connection with contract law matters in California, we can help you to resolve them. Give us a call at 858-964-2314 or contact us online today to schedule a time to speak with one of our business lawyers at Gehres Law Group, P.C. about the help we can provide with contract law matters in or out of the court room.

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