Elements of Contract Law in California
California contract law is the body of law that governs general contracts, sales contracts, and any other contract between two or more parties, including those regarding employment, real estate and other situations. For businesses, contracts are a daily part of commercial transactions, from the first stages of negotiation right through to the signing or execution of the agreement. In each situation, both sides need to understand the language of a contract, its terms and conditions, and what obligations may be attached. While much of the United States relies on the common law for negotiable instruments, California has adopted the Uniform Commercial Code as the legal code governing sales of goods and other transactions.
The statute of frauds is a part of California contract law which requires a written document as evidence of the terms of an agreement in certain circumstances. Specifics about how a contract should be signed, including initials on each page, will be addressed in later parts of this article. Every party to a contract must be of sound mind and mental faculties. This refers to their ability to understand the agreement being made, and its terms and conditions. Also, every person must enter into a contract by their own free will, rather than be forced or unduly compelled to sign the agreement .
The laws around California contracts are derived from Article 1 and Article II of the Uniform Commercial Code as well as the California Civil Code Sections 1550 through 7106. Under the Civil Code, contracts are classified as unenforceable, valid, voidable or void. If there is no reasonable way either of the parties can fulfil the agreement, it is deemed void. Contracts between parties who do not have the authority to enter into the agreement are voidable. A valid contract has the support of the law, and all parties have the legal authority to enforce the agreement. An unenforceable contract is one for which legal remedy is not available, and does not require a court to enforce the terms in the agreement.
Generally, except under very specific circumstances, California courts will not order the specific performance of a contract, mandating one party deliver goods or services as per the agreement. Under certain circumstances, specific performance may be ordered, but the law regarding what circumstances are appropriate for specific performance varies from state to state.
While most contracts are enforceable in California, contracts which are cruel or immoral may be declared void. Even if neither party expressly states their intention to create a legally enforceable contract, if the actions of both parties demonstrate that they have acted in a manner to disabuse the terms of the agreement, the agreement is classed as void.
Why You Should Hire a California Contract Lawyer
When it comes to running a business, having a solid foundation is essential; and that includes the legal aspects. Essentially, this is where hiring a California contract lawyer can help. These specialized attorneys are focused on the essential elements of a contract with regard to the laws of California. Not to mention, they provide ensured compliance for their clients, which ultimately mitigates risks.
Not only can a contract lawyer help with the formation of a business, but he can provide support throughout the entire business lifecycle. Even more, should a dispute come about, a contract attorney can be very helpful in resolving the issue sooner rather than later. Litigation is expensive, so making sure you have a contract lawyer at the beginning can help avoid those troublesome issues down the road.
In addition to forming a business, a California contract lawyer can help with obtaining the proper permits and licenses for your business. Moreover, these attorneys are well-versed in business organization options and franchise laws in the state of California.
California contract lawyers can also help businesses by analyzing contracts for their organization. From the examination of written agreements to advice on standard clauses or terms for California, these attorneys are quite valuable to small and large businesses alike. They can also assist with contract negotiation, making the process much easier and organized.
Qualities to Look For in a Contract Lawyer
In the realm of contract law, not every lawyer has the depth of experience to competently handle your business’s legal needs. When you are looking for the right California contract lawyer for your business contracts, there are certain qualities and qualifications to consider.
Experience with Key Contracts
Most businesses will encounter a variety of contracts over its lifetime. It is important to find a lawyer who has experience with the key types of contracts that are relevant to your business. For example, if you have potential real estate lease agreements, intellectual property licensing or NDAs, find a contract attorney who has experience in these areas.
Specialization
Not all contract lawyers are created equal. While all lawyers develop their skills based on years of practice, some lawyers tend to focus more heavily on particular types of contracts or a specific industry in order to provide superior service to their clients.
Communication
Contracts can easily become complicated. Find a contract lawyer who communicates well with you and your management team. A contract lawyer should also be able to communicate complex concepts to you in a straightforward manner without using a lot of legal jargon.
Types of Contracts Contracted Lawyers Handle
Business Contract: A California contract lawyer will assist you in drafting, reviewing, and enforcing business contracts, whether it be a license agreement or a consulting agreement. Any business deal can usually be documented in the form of a business contract. It makes good business sense to enter into a written contract with other businesses and with others, for example, your landlord, and having an experienced attorney review your business contract will protect you from pitfalls that could be costly.
Employment Contracts: If you have employees or independent contractors, you will likely want to enter into a written employment relation or independent contractor relationship with at least some of those who work for you and for whom you pay. You may find it necessary to have an employment agreement with your CEO, your partner, or your independent contractor providing for your online marketing services, for example, to ensure that you and he or she mutually understand the employment or contractor relationship and agree to its terms.
Real Estate Contracts: Real estate contracts include leases, purchase contracts, sales contracts, notes and deeds of trust. If you have a lease for your business space, for example, it’s good to have it reviewed by a California contract lawyer to make sure you haven’t promised more than you should to your landlord, and that your landlord hasn’t gotten the best of you, either.
Questions for Your Potential Lawyer
As you research lawyers in California, consider the following:
How long have you been practicing business law?
The first question to ask is how long he or she has been practicing business law in California. Ideally, you want a lawyer who has practiced business law for at least 10 years in California. The length of time in practice is a good indication of a good reputation and experience with California law.
How many California contract cases have you handled?
To determine if the lawyer is well experienced in contract cases in California, ask how many cases he or she has handled in the last two years. It is also a good idea to ask if they have handled similar cases. It may be helpful to write down the number of contract cases in the last two years in addition to the number of similar cases.
How will you manage and or collaborate on my case?
Ask the lawyer how he or she will manage the case. In addition , ask how you will be kept apprised of the development of your case.
What are your fees?
It is important to ask how much the lawyer charges. You will want to know what his or her hourly rate is in addition to the retainer fee. Ask how you will be billed and how often. You should obtain a written copy of the legal fees, payment schedule and all billing practices.
Can you provide me with references?
It is very important to get references, ideally at least three. While the lawyer will provide names of clients, you can do your own reference checking by looking at the California State Bar Association website. The State Bar keeps track of all disciplinary actions that an attorney has been involved in as well as license status. Make sure the lawyer you are hiring has no disciplinary actions, which can be a red flag.
Preparing for a Consultation
Preparing for a consultation with a contract lawyer is crucial to ensuring that you get the most out of your time with them. While it’s always impossible to be completely prepared for a meeting, coming in as informed as possible can help expedite the process of drawing up a solid contract that clearly states the expectations of both parties to the agreement. These are some of the primary things you should consider before meeting with a contract lawyer and some questions you should ask them.
The lawyer may ask you if there are any other parties involved with the contract. While it may be a simple transaction between you and one independent contractor, it’s best to lay all the cards on the table. If there are more than one person acting as an independent contractor, or if you’re just hiring them on behalf of a corporation, these are all things to communicate with the lawyer beforehand so they know the complete picture of what the contract entails and can proceed accordingly.
It’s not a problem if you don’t know all of the details of the contract you want to draw up, especially if it’s an independent contractor agreement that you’re unsure how to begin. Any good contract lawyer will be able to communicate with you to understand your needs and craft language that meets your expectations. That said, you should have a broad idea of the structure and expectations you want to incorporate—from specific language that must be included in the contract to expectations of timeframes for completion of work relative to payment schedules.
The majority of the time, effective contracts don’t require difficult legal jargon in order to convey their meaning. In fact, with most contracts, using plain language to lay out agreements is a much better practice—in most cases, excessive legalese will draw more questions than it will answer. The first portion of your consultation will likely be spent going over the ins and outs of the contract, so if you are very clear on specific expectations, you can bring that evidence to your lawyer to explain what exactly needs to be spelled out in the contract. Otherwise, you can get that information from them when you meet with them.
You may be familiar with the general types of contracts and the general language that’s common among them. However, wouldn’t it be easier if someone could tell you exactly what the options and expectations are for parties who enter into various kinds of contracts? That’s where a lawyer comes in—they should be able to offer guidance and answer questions, even if you feel like those questions are elementary or obvious. There is no such thing as a dumb question, and the more knowledge you can gather about what you’re getting into with a contract and the specifics of how to go about negotiation, the better your experience will be.
Next Steps to Hiring
Once you have chosen who the best California contract lawyer for your business needs is, the next steps are simple. First, you will require a retainer agreement, which is a written document that the California contract lawyer and your company sign. In that agreement, the California contract attorney should provide what their services are to you, what the fees are for your paying that contract lawyer, and how they intend on keeping you sufficiently informed of the ongoing work. Any client should read the retainer agreement and ask any questions they have of their California contract lawyer. It is vitally important that you understand what the written agreement provides before signing it.
The next step is for you to bring to the California contract lawyer all the documents that relate to the transaction. You have to be as honest as possible and provide the California contract attorney with everything that is related to the subject matter you are working on. Being open and honest sets a constructive tone that will allow you and the California contract lawyer to work together successfully. Without trust , the relationship will fail. You should also be forthcoming and provide the California contract lawyer with all the pertinent facts involved so that they can do the work that they need to do.
Once you have established a basis of trust and given all the documents to the California contract lawyer, you are ready for them to immediately start the legal review process or beginning the drafting of contracts. It is very important that the California contract lawyer remembers that their first goal is to protect your interests above all others. Once the draft is done and you are happy with the provisions provided in the written agreement, you will then sign off on it and everything gets sent out to all parties involved.