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Contract disputes and how to avoid them – Part 1
We all try to avoid becoming involved in contract disputes, whether as an individual or a business. Unfortunately, that’s not always possible. If you’re dealing with a breach of contract, a contract dispute is sometimes the only way to ensure that your interests are protected. First, let’s learn a bit more about contracts and contract disputes. Then we’ll take a look at some tips for avoiding them in the first place.
What constitutes a contract?
In order to understand breach of contract, we must first understand what it takes to make a contract to begin with. To be enforceable, a contract must have four elements:
- Offer – one party must offer to either do something, which is usually the case, or refrain from doing something.
- Consideration – the other party must offer something in exchange. Consideration can take the form of money or other assets, services, or a promise to do or not do something in the future.
- Acceptance – there must be clear acceptance of the terms of the contract. Acceptance can be written, verbal (in some cases), or through action as specified in the contract.
- Mutuality – the contracting parties must have a mutual understanding of the terms of the contract.
In New Mexico, some contracts can be made verbally. However, per the Statute of Frauds, there times when a contract must be in writing:
- When the contract will take longer than one year to carry out.
- When the contract is for a sale of goods of $5000 or greater
Material vs. Non-Material Breach of Contract
Check back soon for All about contract disputes – including how to avoid them, part 2. In the meantime, check out our page on contract disputes.
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