Tuesday, April 22, 2008

A Note On Contracts

A recent court case in New York City (as reported in the New York Post) serves as a reminder on the basics of contract law.

It might as well have been set in stone. A contract
written on notebook paper is legally binding - and worth $10.5 million to a Brooklyn Internet exec, a federal jury has ruled.

The decision is but the latest victory for Alfred West, 46, who has spent years battling the Newark, NJ-based telecommunications firm IDT over the pact's legality…. IDT had argued that the handwritten pact had no legal standing.

Many people do not realize that a written, binding, contract can be created very simply. Under New York law, a written contract is often created merely by the following:

  • An offer or promise;
  • An acceptance of that offer;
  • Some form of consideration or payment.

In addition, not all contracts need to be in writing to be enforceable. In many cases, an oral agreement, supported by appropriate consideration, will create a binding contract.

Failure to abide by a binding contract can result in money damages or an order of “specific performance,” where the court directs a person to act in a particular manner to fulfill an existing contract. Furthermore, a contract may provide for additional penalties, or directives as to how a dispute between the parties will be tried before the court.

Consumers should be very careful whenever asked to sign any document. Furthermore, when in doubt, it is always wise to consult an attorney who can provide advice on contract law.