Common Misconceptions about Contracts

Common Misconceptions about Contracts

We all have a basic understanding of what a contract is and why contracts are used, yet there are a surprising number of misconceptions that lead to contract breaches and legal disputes. Obviously, no one wants to get into a costly legal battle with someone in a contract agreement, so it’s best to make sure you clearly understand contract law in Florida before creating your own contract. Read through these five common myths about contracts and you’ll hopefully be able to avoid the pitfalls yourself.

Five Popular Myths about Contracts in Florida

Contracts must be written. Although “get it in writing” is always good advice, it is possible to have a legal binding verbal contract in Florida—under certain circumstances. Unless the type of contract is required by law to be in writing, a verbal contract can be enforceable, as long as there has been an offer to provide goods or services in exchange for some form of payment and an acceptance. Keep in mind, however, that verbal contracts are much more likely to lead to hard-to-resolve disputes because the terms are not clearly and objectively laid out in writing.

Five Popular Myths about Contracts in Florida

An agreement is legally binding after there has been an offer and acceptance from the contracting parties. While an offer and acceptance are necessary for a contract to be legally binding, an offer and acceptance alone won’t automatically make a contract legally binding. Both contracting parties need to have the capacity to enter into that contract (for example, someone under the age of 18 is usually viewed as not having the capacity to enter a contract), and the agreement cannot involve any actions that are impossible or illegal.

You automatically have the right to cancel a legally binding contract that you’ve entered into. Signing a contract isn’t something you should enter into lightly, because it’s not always easy to get out of without breaching it (and making yourself vulnerable to a lawsuit). Some contracts will have the right to cancel, called the “right to rescission,” written into them, but even these contracts will often include a limited amount of time that you can cancel the contract, and if you don’t file written notice within that time, you give up your right to rescind.

You will be able to take a contracting party to court for breach of contract. Some contracts contain something called an “arbitration clause,” which states that any disputes related to the contract must be resolved in arbitration rather than a court of law. This can be problematic if you enter into a contract with a business and the business uses their own arbitrator, because the arbitrator is most likely going to favor the business. Watch out for arbitration clauses, and be sure to talk to your lawyer if you’re unsure whether you should sign something.

There is a standard statute of limitations for any lawsuit involving a contract breach. Under Florida law, you typically have five years (or four with a verbal contract) to file a lawsuit for breach of contract. However, many contracts contain a clause stating that you actually have a much shorter period of time to file a lawsuit, so read through the contract carefully and know exactly how long you’ll have to take legal action if the other contracting party doesn’t live up to their end of the agreement.

If you’re writing your own contract or are preparing to sign a contract but are unsure about some of the language it uses, it’s a good idea to have a lawyer look it over. And if you’re already involved in a contract dispute, you’ll definitely want to contact an experienced contract dispute lawyer in order to protect your interests.

About the Author:

Ben Murphey is a personal injury lawyer and a partner at the firm of Lawlor Winston White & Murphey. Mr. Murphey has 10.0 Superb AVVO rating, was named Top 1% of Car Accident Attorneys by Car Accident Lawyer, and was named a Super Lawyer by Super Lawyers in 2014. Mr. Murphey is based in South Florida but represents people and businesses across the state who have been harmed by the wrongful acts of others.

 

Common Misconceptions about Contracts

We all have a basic understanding of what a contract is and why contracts are used, yet there are a surprising number of misconceptions that lead to contract breaches and legal disputes. Obviously, no one wants to get into a …