Doing business, whether you sell services or products, is complex. To run your operations, it’s likely that you will have to collaborate with other enterprises and people. This means agreements and contracts must be made. When you come together with another party and establish an agreement, both your role and responsibilities and that of the other party should be included and clear. This process is referred to as the meeting of the minds. That is, the official consent given by two or more parties to a contract’s specifications and terms.
Due to the legal ramifications that can come about if issues arise after a meeting of the minds, ensuring the contract is written properly to reflect your needs and interests is essential. Working with a professional when you are drafting a contract can help you make sure you are better protected should any disputes or challenges come about down the road. The Los Angeles business attorney at the Leiva Law Firm can assist you with all your contracting needs, from drafting agreements to reviewing them.
Defining the Meeting of the minds
The meeting of the minds is the foundation of contract formation. There are three elements that exist when parties go into an agreement that makes it legally binding. These are:
An offer happens when services or goods are rendered in return for certain terms or provisions. The terms can include payment or even the return of other services or goods, for example. The understanding is that what is offered will be provided if the terms are acceptable.
After an offer is made, the parties included can decide to accept as is or negotiate, but once an offer is agreed to, it is accepted.
The contract has mutually agreeable terms for all parties. Each party considers their responsibilities for what valuable action or good they must do or give to obtain the service or goods of value in return.
There are many different types of contracts that a business owner may enter into. Two such examples include
- Employment contracts are where you consider a job offer to an individual in return for payment for their work. An employee you hire accepts your offer and considers their pay for performing certain duties within your company.
- Vendor contracts could be you offering a certain price for specific goods that another entity supplies. That entity is then willing to be paid for the supplies.
When all aspects of the meeting of the minds are implemented and a formal contract is formed, each party will be legally bound to uphold their obligations. Mistakes, errors, or breaches of those obligations can result in legal battles and potential court involvement.
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Having a clear understanding of contract terms must be established to hold a party to a contract accountable if a breach happens. Though if it can be shown that the terms of a contract are unclear and could be open to interpretation, then it may be decided that a meeting of the minds did not actually take place, which could invalidate the legal bounds of the agreement.
For all of your questions surrounding business contracts in California, please call the Los Angeles business lawyers at the Leiva Law Firm to schedule a free consultation at (818) 519-4465.