Contract Law FAQ
Arizona Contract and Business Lawyers
With our emphasis in commercial law, the majority of our cases invariably involve one type of contract or another. This includes:
- Contracts for the sale, lease and construction of commercial and residential property
- Employment contracts
- Noncompetition and anti-piracy agreements
- Promissory notes
- Mortgages (deeds of trust)
- Development agreements
- Advertising agreements
- Investment agreements
- Operating agreements for limited liability companies
- Partnership agreements
- Bylaws for corporations
What Is Business Law?
Business law encompasses a wide array of legal issues that include contract drafting, contract disputes, the formation of businesses, litigation and legal document review. In forming a new business, you typically need some form of governing document to get started. If you are starting a limited liability company (LLC), for example, then you will need an operating agreement. If you are starting corporation, it is best to have bylaws prepared. A good contract law attorney or contract law firm is invaluable in getting these documents prepared correctly.
When Should I Have A Lawyer Prepare A Contract?
Anytime that you or your business is entering into an agreement or transaction that you consider to be important, or that could have a substantial impact on your business, that agreement or transaction should be reduced to writing. A good business and contract attorney will help you protect your interests by drafting documents such as a partnership contract, development agreement, consulting agreement or joint venture agreement. If you are buying a business, you will want to have an asset purchase agreement prepared that includes a noncompete agreement that prevents the seller of the business from competing with you after your purchase of the business has closed. If you are involved in real estate or in the construction of a building, a good Arizona real estate attorney will prepare a comprehensive construction contract or general contractor agreement that protects you whether you are the owner or the contractor.
Do I Need A Written Contract?
Yes. Even if the law may not always require it, we strongly advise our clients to put their agreements in writing. The point of a written contract is to create clarity on what each party’s rights and obligations are. This is true of all types of transactions, but is especially true in the case of employment agreements, joint venture agreements, partnership contracts, operating agreements, corporate bylaws and promissory notes. When you enter into any kind of business or arrangement, you want to reduce your risk as much as possible. You want to have as much certainty as possible. A clear written contract spells out what is supposed to happen, when, and who is supposed to do it. It will either keep you out of litigation entirely or at least substantially reduce your legal expense should a lawsuit be filed.
What Are Common Types Of Contract Lawsuits?
The most common type of contract litigation is for breach of contract. A “breach” generally means that a party has either failed or refused to perform one or more of their obligations under a contract, or has done something to frustrate the other party’s ability to benefit from the contract. You can also file a claim asking the court to enter an order of “specific performance.” An order of specific performance is a direct order to a party requiring them to perform their obligations under the contract. Another type of contract lawsuit is for a “declaratory judgment.” An action for declaratory judgment asks the court to interpret one or more terms of the contract, or to resolve a dispute over what each party is obligated to do under the contract.
What Kinds Of Damages Can I Recover In A Contract Case?
The types of damages that can be recovered in contract cases include compensatory (or actual) damages, consequential damages and liquidated damages.
- Compensatory damages are the amounts that you actually lost out of pocket as a result of the other party’s breach of contract. If you pay money to a vendor to sell you equipment for your business and the equipment is never delivered, then your actual damages will be the amount that you paid to that vendor plus interest.
- Consequential damages are additional damages that occur beyond your out-of-pocket losses. If, for example, the equipment that was not delivered to you was going to be used to manufacture products that you would have sold for a profit, then your consequential damages would be the amount of those lost profits.
- Liquidated damages are a set, specific amount of damages that your contract says you will be awarded if the other side commits a certain type of breach. They are intended to represent a reasonable forecast of what a party will actually lose if a breach occurs. If the amount of liquidated damages in the contract are excessive or appear to exceed a reasonable forecast of the harm that will actually result from a breach, the court may not enforce that part of the contract.
More Questions? We Have Answers.
Weinberger Law has over 30 years of experience in drafting various contracts for your personal and/or business needs. We welcome you to schedule a consultation so we can answer any questions you may have. Call (480) 900-5192 to schedule a consultation today.
We are located in Scottsdale and work across Arizona.