The business law attorneys at Calabrese Law Associates understand the importance of avoiding business disputes and they possess the expertise needed to help clients maintain and/or create a profitable business model. In business, clear and effective communication is critical to success and to avoid disputes.
Generations ago, business agreements were often simple verbal agreements (not reduced to writing). Even today some verbal agreements are still considered valid and enforceable contracts in Boston and throughout Massachusetts but this is a practice that the modern business owners should avoid.
The purpose of a business agreement is to create a set of terms that will govern/control a particular business dealing. Since the business agreement is what “controls” the deal, it is vital that all parties to the agreement understand its terms. Therefore, businesses in Boston, the Greater Boston Area, and throughout Massachusetts should always require that its business dealings be governed by a valid and enforceable written contract.
Pursuant to Massachusetts law, a valid and enforceable written contract is created when:
- One party offers to provide another with property, good(s), service(s), etc.
- The offer being made is accepted
- All parties to the agreement promise to exchange something of value (e.g. money) – this is known as “consideration”.
Here is an example of two people creating a valid and enforceable contract:
John offers to sell Ann his business for the price of $200,000. Ann accepts John’s offer and they both sign a written purchase agreement. Ann then pays John $200,000. Upon receiving Ann’s payment John gives Ann ownership of his business.
In this example, John made the “offer” and Ann “accepted” his offer. The “consideration” provided by Ann is her promise to pay John the $200,000 for his business. The “consideration” provided by John is his promise to give Ann his business after he receives payment.
Here John and Ann have entered into a to valid contract for the purchase of John’s business.
A properly prepared business agreement accomplishes five specific objectives that help avoid disputes and grow your business:
- A written agreement clearly communicates the subject matter and scope of the agreement to all contracting parties. This reduces the risk of confusion and disputes among the parties.
- A signed written agreement is evidence of the contracting parties accepting the agreement. This reduces the risk of confusion and disputes among the parties.
- A signed written agreement is itself evidence of an agreement among the parties. This allows the parties easily prove the existence of the agreement and enforce that agreement should a dispute arise.
- In Massachusetts, certain agreements are void unless they are evidenced by a valid and enforceable signed written agreement. Eliminate this risk by always having a properly prepared written agreement in place.
- A properly prepared written agreement is an essential component to creating an efficient and profitable business model. In business, efficiency and profitability are by-products of successfully performing ones contractual obligations. Therefore, the more clear the agreement is, the easier it is to identify ones contractual obligations and make a profit.
Business contracts come in many forms such as:
- Partnership agreements
- Joint ventures and other agreements with other businesses
- Agreement for the sale of goods (for example, a supplier or provider of goods or services to another party)
- Agreement for the purchasing or sale of intellectual rights, franchises, products and services as well as leasing property or goods
- Agreement for securing loans and financing
Creating and Negotiating a Contract
Although it’s possible to create a contract simply by writing a detailed agreement between two parties and signing it, negotiating and drawing up a contract can be complex. Both parties may not agree to specific terms and conditions or may want changes made before the contract is signed. Working with a business contract attorney in Boston, Massachusetts can help ensure your contract is valid and enforceable – this can give you an advantage when it comes to negotiating.
If you’d like to speak to a business contract attorney in Boston, Massachusetts, contact Calabrese Law Associates for a free consultation. We have helped many businesses create successful and defendable contracts and would be pleased to offer you advice as well as support as you enter into your new business agreement.
This publication and its contents are not to be construed as legal advice nor a recommendation to you as to how to proceed. Please consult with a local licensed attorney directly before taking any action that could have legal consequences. This publication and its content do not create an attorney-client relationship and are being provided for general informational purposes only.
- Business Formation and Planning
- Choosing the right business formation structure is the first important decision every successful Massachusetts business owner must make. Each business structure has its own advantages and disadvantages. The challenge for business owners is to decide which business formation structure works best for their business, small or large. For example, a partnership is an association of two or more persons to carry on, as co-owners, a business for profit. However, partnerships come in a variety of forms.
Click here to learn more.
- Partnership Agreements
- A partnership is formed when two or more people agree to carry on a business, sharing profits and losses. If you decide to form a partnership, you have the option of choosing to create a General Partnership, Limited Partnership or Limited Liability Partnership. General Partnerships require no formal formation processes while Limited Partnerships and Limited Liability Partnerships require the filing of paperwork with the secretary of state. Thus, you will want to take these factors and other into consideration when forming a partnership.
Click here to learn more.