What Makes a Business Contract Legally Binding

There is plenty of debate as to what constitutes a legally binding contract. A good argument is that a judge’s interpretation of law defines what constitutes a legally binding business contract, yet legal standards ultimately shape rulings and justice.

There is no shame in admitting you aren’t entirely sure what makes a contract legally binding. Search the web on small business contracts or “how to make a legally binding contract,” and you’ll be inundated with lots of information that contains poorly-written templates and complex legalese.

What Makes a Business Contract Legally Binding? | Niswanger Law in Monroe, LA. Closeup image of a man’s hand signing a contract, with a woman in the background.

Fret not. Niswanger Law in Monroe, LA is here to help you carefully craft your business contracts.

The Basics of Binding Contracts

Legal enforcement is at the heart of contract law. Business contracts written with language that honors and respects the law are much more likely to be enforceable throughout the agreement’s duration.

Word choice and attention to detail distinguish between a legally binding contract and one that can’t hold up to legal scrutiny from opposing counsel, a judge, or another adjudicator.

Binding contracts are best defined as legal agreements that are enforceable within the parameters of the law. A party that signs a contract considered to be binding yet fails to fulfill contractual obligations can prompt the other party to take legal action.

Binding contracts contain essential elements, including legal capacity. This means the parties that signed the contract must have been eligible.

The “intention” component of a binding contract refers to the fact that the parties are contractually bound to fulfill their duties. The “consideration” component is the mutual benefit enjoyed by both parties, be it in the form of services, products, financial gain, or something else of value.

Non-binding Contracts: Legal Oversight or Purposeful?

In contrast, non-binding contracts are contracts in which one of the elements necessary for a binding contract is missing. If the contract has language stating that it is non-binding, then it is non-binding.

This type of contract is often used as a temporary means to an end. It empowers two sides to write out ideas on paper without making a legal commitment at that moment.

Instances in which non-binding contracts result from attorney error are also within the realm of possibility. Let Niswanger Law in Monroe, LA write and enforce the language of your business contracts, and you’ll enter into those agreements without consternation.

Let Niswanger Law Help You Craft Your Business Contracts

Suppose you own a business or are considering starting a business in Monroe, Shreveport, Jackson, or Alexandria. In that case, our business lawyers can help with business contracts and additional legal challenges inherent to the business landscape.

Reach out to us today by calling (318) 953-0071 or filling out this form. Our office is at 3814 Cypress Street, West Monroe, LA 71291.