Texas Contracts

A Texas contract is an agreement between at least two parties (individuals or businesses) that describes what the parties have agreed to. Provisions agreed to can be positive (do X), negative (not do Y), or a combination of both (do X but not Y).

Although parties usually intend for their contract to be legally enforceable, there are agreements that may not be legally binding. For instance, if one party to the agreement is mentally incompetent, the contract might not be binding against him. A contract to do something illegal is almost always unenforceable. For example, if the parties agree to sell cocaine (an illegal substance), there isn’t going to a way to enforce the agreement in court or otherwise.

Most Texas business contracts of value are in writing to ensure that they can be enforced. However, in some instances, a verbal agreement can be a binding contract. Factors that may determine whether an oral contract is legally enforceable include the dollar amount (value) of the contract and whether the parties can perform their obligations under the agreement in less than one year.

Oral agreements are not preferred because they can lead to misunderstandings (and related lawsuits). The better course of action is to have a written agreement signed by all the parties to the agreement.

Whether or not your Plano, Texas business attorney negotiates the contract on your behalf, you should have him paper the details to make sure that your rights are fully protected.

Of course, the best action is to only enter into contracts with parties who you trust will carry out their obligations under the agreement. If your gut instinct bugs you about a potential deal, that red flag is probably a good sign that the proposed contract will harm you in some way. Be prepared to walk. There are always alternatives to signing a bad contract.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows Texas entrepreneurs how to protect and grow their businesses.
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