The law says that every time two people agree to exchange things of value, a contract has been formed. Of course, there are qualifiers to this basic principle, but this definition is almost always true. So what does it mean to have a contract? It means that the two things must be exchanged, as agreed, or the party who fails to transfer their thing can be held liable. This is an example of breach of contract.
One can sue on breach of contract, but it is wise to ask yourself the following questions. First, is it cost-effective to sue? Second, does the breaching party have anything that can be taken, to satisfy a judgment? Third, do you have the time to spend on a suit? Fourth, can you handle the stress that is involved in being in a lawsuit? I guess that all of this depends on how much the breach of contract has damaged you. If you have lost a great deal, you can easily answer “yes” to all of these questions. And in a suit for breach of contract you can recover attorney fees. However, if the amount that you have lost is not so great, perhaps you continue your life and forget about what happened. Discussing these questions with a lawyer may lead to a wise decision about a breach of contract.
What about proof that a contract exists? The law sets forth four or so factors to consider in reaching a conclusion. But most often it is as simple as I have said, an agreement to exchange two things of value. Oral contracts can be difficult to prove directly, as there may be a “swearing match” as to whether an agreement was made. There are several different ways to indirectly support a finding that there was a contract, but it is beyond this blog entry to discuss them. Suffice it to say that you need to discuss this with a lawyer.
Written agreements are easier to prove to be contracts. The writing can be short, or very detailed and extensive. Generally, a contract for a small exchange can be as simple as a letter signed by both parties. This could fit a situation where a loss of something valuable in a breach of contract is a loss that can be easily absorbed. Or a lawyer can write a simple contract for you of about three pages. When the amount at stake becomes larger, it is important that all of the factors that could affect the act of exchange be written, as well. When the amount at stake becomes very large, you will want your lawyer to also write provisions that would protect you, in the case of a breach of contract lawsuit.
Of course, contract law is very complicated and difficult to learn. But this entry sets forth the basics, which may be enough to tell you when you can do something very small on your own, or tell you that you need a lawyer, for sure. And tell you how complicated creating a contract may be, and therefore some idea of the cost involved. In the last month, I have written contracts as long as 18 pages, plus 15 pages of exhibits attached to the contract, and 6 collateral documents. And as short as three pages. It depends on what is at stake.