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Enforcing business contracts in the state of Texas

Companies in Texas, and elsewhere, commonly use contracts in nearly every facet of their businesses. Whether oral or written, informal or formal, both sides generally expect each other to uphold their side of these agreements. When one side, or the other, fails to fulfill their obligations, contract disputes may arise. As such, it behooves people to understand when Texas business contracts are enforceable to help avoid these types of issues.

In order to be legally binding, business contracts in Texas must have certain elements. The state’s Comptroller of Public Accounts points out that these elements include the following:

  •        A legal objective or purpose
  •        An offer
  •        An acceptance of the offer’s terms
  •        A meeting of the minds, or mutuality of obligation
  •        Consideration

Furthermore, the parties who are entering into the contract must be competent. This means that both sides must be legally and mentally able to make decisions for themselves. Additionally, those entering into a contract must be authorized to enter into a contract. For example, a person who works for a contractor signs a contract to provide services for a customer on the contractor’s behalf. However, he did not have the permission or authority to make such a promise. The court may not uphold this contract if it is called into question.

Not all contracts must be written in order to be enforceable, however, it does tend to make the process easier. There are, however, certain types of contracts that Texas state law stipulates must be written. These include promises to pay debts; real estate leases; agreements to pay for the purchase of mineral interests, minerals, oil or gas royalties, and oil or gas mining leases; loan agreements; and some agreements relating to medical care.

Issues involving contracts can bring business to a screeching halt, and may result in costly litigation. As such, those who are considering entering into a contract, or who are engaged in a contract dispute, may benefit from working with an attorney. A legal representative may help them to understand their rights and options, as well as to develop legally binding contracts.

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