Austin Business Lawyer

Contracts Center - Frequently Asked Questions

Q: Do contracts have to be written?

A: It depends on the subject matter of the contract. As a general rule, verbal contracts are just as valid and enforceable as contracts that are reduced to writing. However, the Statute of Frauds enumerates certain types of contracts that must be in writing to be enforceable. These include:

• contracts concerning real estate
• contracts that cannot be performed with one year
• contracts for the sale of goods of $500 or more
• promises to pay another person's debts
• promises by an administrator to personally pay debts of the estate
• promises in consideration of marriage

Q: What does "option contract" mean?

A: An option contract is one that gives one of the parties the right to create another contract. The typical option contract involves an upfront payment by one party so that the other party will guarantee to hold particular goods for a certain period of time and sell them at a certain price.

Q: What is an offer?

A: An offer is one of the essential elements of a contract. By making an offer, a party conveys his willingness to be bound by certain promises. The contract is formed when the offeree accepts the offer.

Q: What is acceptance?

A: An acceptance is another of the elements of a contract. Once an offer has been made, the offeree can complete the formation of the contract by conveying to the offeror that he is willing to be bound by the terms of the offer.

Q: What is "breach of contract"?

A: After a legally enforceable contract has been created, the parties are legally required to perform their respective duties under the contract. A breach of contract is what triggers a cause of action to enforce the contract.

Q: What remedies can be recovered in a breach of contract suit?

A: Various remedies are available in breach of contract suits, depending on what the injured party suffered as a result of the breach. They include:

• Monetary damages in the amount of what the injured party would have received if the breach had not occurred
• Specific performance-that is, a court order that the breaching party perform whatever action was promised
• Cancellation and restitution to compensate for monetary loss or other damage suffered as a result of the breach
• Quasi-contractual remedies

Q: Is there an age requirement to form a contract?

A: All most all jurisdictions treat minors (below 18 years) as lacking capacity to enter into contracts. In those jurisdictions, contracts with minors are voidable, if the minor asserts the voidability, with the exception of contracts for "necessities", which includes food and clothing.

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