You may enter into and breach more contracts during the regular course of business than you think.
However, when your contract partner fails to adhere to the point that it negatively influences your operation, you may have to petition a Massachusetts court to enforce the agreement. To do so, the court must first determine if a contract actually exists. Then, it will look for valid defenses to the contract that would make the terms unenforceable.
How a promise becomes a contract
According to FindLaw, any well-defined exchange of promises may constitute a legally binding contract. Since the transfer of something valuable for a “consideration” is the foundation of your business, your contract may be as big as a corporate merger or as small as a routine customer transaction. Contracts may be verbal or written, but the consensus is that a properly documented agreement is easier for a court to rule on.
How the court determines enforceability
After a court establishes that your exchange of promises qualifies as a contract, it will apply a set of criteria designed to protect those entering into unfair agreements:
- Capacity: Parties entering a contract must be of legal age and have the mental capacity to have a complete understanding of the terms in the contract and the consequences of failure to comply.
- Undue pressure: Parties may not coerce by lying, omitting facts, threatening or taking advantage of their relationship to the second party.
- Unconscionability: Parties must adhere to a fair and moral bargaining process; they cannot target individuals who are unable to read or understand the contract or hold such a position that they have no choice but to sign.
- Illegality: Parties cannot negotiate contracts that outline immoral or illegal activities.
- Mistake: Parties may void a contract built around information that was later determined to be incorrect.
- Force majeure: Parties may cancel a contract due to unforeseen events such as war, natural disasters or labor disputes.
If any of these conditions exists, a court can rule that there is a valid defense to the contract and grant the disadvantaged party the right to revoke or void the agreement.