Is your agreement binding and enforceable?

By: J. Mason Williams IV

One question that has to be answered in nearly every breach of contract case is was there a contract or was there an agreement?  Although this sounds simple enough, and often times it is, there are several different types of agreements and in Florida, there are several ways to make an agreement, modify an agreement, or make a counter-offer and you may not even realize you have done it.  Black’s Law Dictionary has several definitions for a contract, and lists numerous types of contracts, but the basic definition is “[a]n agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.”

If we break that definition down, we can really see that four elements are needed:

1. an agreement,
2. two or more parties,
3. obligations for each party, and
4. enforceable or recognized at law

An agreement can be a tricky part despite how seemingly simplistic it sounds.  For instance, if Andrew makes an offer to sell 1,000 widgets to Bob for $1,000 and Bob replies in an email with “3,000 widgets for $3,000,” do you have a contract?  If so, what is it for, 1,000 widgets or 3,000 widgets?  The short answer is there might be a contract.  More than likely, you have an offer from Andrew and a counter-offer from Bob.  If Andrew starts making 3,000 widgets though, you likely have acceptance of Bob’s counter-offer through performance.  An agreement is typically formed through an offer and acceptance.  Whether there is an agreement also depends on what is involved, i.e., goods, services, etc.  So in this example, whether an agreement or contract was formed likely depends on whether Andrew reasonably relied on Bob’s counter-offer.  If he did and he started performing, then Bob is likely on the hook for the $3,000 (unless of course Bob has an excuse).

Since our example involves two parties, that part is easily met.  Since Andrew would be required to produce 3,000 widgets, he clearly has an obligation.  In turn, Bob has to pay $3,000 for those widgets so he also has an obligation.  Lastly, the agreement must be enforceable.  This agreement likely is enforceable.  An agreement might not be enforceable if it is unconscionable, against public policy, or arranged by duress, just to name a few examples.  For instance, if widgets have been made illegal objects to buy and sell in the United States, then a contract to buy and sell them would be unenforceable as against public policy.  As another example, if you sign a contract because someone is threatening your life at the time, then duress would make the contract unenforceable.

Whether an agreement or contract exists can be very technical at times and even if the elements of a contract are met, it might not be enforceable.  Any time a contract or an agreement is made, you should consult an attorney to make sure that you get what you want, and often times more importantly that you do not get what you do not want.  Sometimes one term of a contract or even one word can make an enormous difference.  You might also save yourself the expenses of Business Litigation.