Leading Financial and Family Law Attorneys
All about contract disputes, including 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
The first thing you’ll need to determine about your contract dispute is wether you’re dealing with a material or non-material breach of contract. A material breach of contract is one that is so severe that there’s no way the agreement can be carried out. In these cases, the court considers the agreement irreparably broken.
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.
Enter your details below to schedule a consultation.