A legal contract is any agreement that is enforceable under contract laws. While most legal contracts are written and signed, some jurisdictions recognize oral agreements as legal contracts. Generally speaking, it’s best for a contract to be formalized in writing, especially for valuable subject matters or for complex arrangements.

Legal contracts can be used by both individuals, as well as organizations such as businesses and corporations. However, any legal contract must be entered into in a way that is:

  • Fair for both parties; and
  • Free of any fraud, coercion, and/or misrepresentations.

In order for a contract to be legally valid, it must fulfill the requirements for a valid contract which are set forth by state and federal laws. A legal contract should meet all of the following requirements:

  • Offer And Acceptance: One party must make an offer, and the other party must accept the offer. Both offer and acceptance must be done in such a way that is clear and unambiguous;
  • Assent: Both parties must mutually agree to the terms of the contract. They should be clear regarding the terms, words, and definitions that are used in the agreement; and
  • Consideration: Each party must exchange something of value. An example of this would be how one party is generally providing service or goods, in exchange for monetary payment.

Some contracts must be in writing in order to be legal. Examples of these include contracts for the sale of real property, as well as contracts for the sale of goods worth over a certain amount. Generally speaking, if it’s over $500, it must be in writing.

There are many reasons why a contract can be invalidated, the most common of which being if one of the requirements listed above was not met. An example of this would be how if only one party assented to the agreement, the contract is not considered to be legally binding.

A court may declare a contract to be void, meaning that the contract is canceled, as if it never existed. The parties could be released from their duties as detailed in the contract. In other cases, the court may declare the contract “voidable,” meaning that the parties can cancel the contract at their own election.

What Are Advertisements Contracts?

Generally speaking, advertisements, catalogs, brochures, and announcements to the public associated with the sale of merchandise at a specified price are not considered to be offers to enter into a binding contract. Rather, they are considered to be invitations to make a deal. As such, it is not generally a breach of contract when the advertiser refuses to sell an item at a price that they advertised.

An advertisement may be considered a valid offer if it meets the following three elements:

  1. It is sufficiently definite in its terms, meaning descriptions, quality, quantity, & price;
  2. It is communicated to a specific person or people, generally a limited group of people; and
  3. The circumstances surrounding the publication show that the advertiser intends to enter into a contract.

The defining factor that most courts consider is whether the parties had the intent to assume legal responsibility of entering into a contract. However, this can vary by jurisdiction.

When Can An Advertisement’s Offer Be Legally Enforceable?

Many courts will consider the objective manifestation of the advertiser’s intent; meaning, the court will consider whether a reasonable person would read the advertisement and believe that the advertiser intended to form an agreement. However, the circumstances of the case are also taken into consideration. An example of this would be how an advertisement which offers a cow to farmers in exchange for $50 will not be taken seriously in a major city. However, the same advertisement in a rural area might be a legal offer.

Other courts consider whether the plaintiff had actually accepted the offer that was made by the advertiser. A party accepts an offer when the party acts in a manner intended to fulfill their end of the bargain. An example of this would be if a person sees an advertisement which asks college students to send in their used books in exchange for cash. A college student accepts the offer if they send their used books to the advertiser.

However, some offers require a specific method of accepting an offer, which excludes all other methods of accepting an offer. An example of this would be if you see an advertisement which asks college students to register, so that they can send their used books in exchange for cash. You must register in order to accept the offer, as sending in the books will not be a valid form of acceptance.

What Else Should I Know About Advertisement Contracts?

If an advertisement contains a pricing error that is to your advantage, you generally cannot make the advertiser sell the item to you at the erroneous price. Unless the advertisement meets the above elements of an offer, it is unlikely that you can benefit from the erroneous advertisement. The advertiser will generally assert that they either did not intend to sell at the erroneous price, or that the terms of the advertisement were not definite enough.

However, the advertiser can legally choose to sell the item at the erroneous price. The advertisers may do so in order to preserve business goodwill with its customers and affirm the contract, even though the price was wrong. However, if the advertiser voluntarily chooses to accept the erroneous advertisement as an offer, it may bar you from recovering damages from the printer and/or publisher of the advertisement who is responsible for the error. An advertiser may also sell the item if they used bait and switch selling tactics in violation of consumer protection laws.

An offer is said to be revocable unless the advertiser has already received a benefit, or unless the other party has already acted in reliance upon the offer. An example of this would be an advertisement which promises that medical treatment for cancer patients will be revocable, unless the advertiser has already received payment from the patient. Alternatively, the offer cannot be revoked if the patient has moved in from across the country in order to take advantage of the offer.

False advertising is prohibited by federal and state law, including the Latham Act. These laws prohibit deceptive business practices, such as claiming that a product is “on sale” and then raising the price of the item.

Additionally, advertisements cannot discriminate against protected classes. This is particularly true for job and real estate advertisements, which are specifically regulated by the Civil Rights Act and the Fair Housing Act. State laws may also restrict discriminatory advertisements. Simply put, if a business invites the public, the business cannot be selective about who it invites unless the person would pose a danger to the business or to other people.

Do I Need A Lawyer For Help With Contract Issues?

If you enter into a contract, a contract attorney can help with proper drafting in order to provide you with legal protection later on. A business lawyer can help you draft, review, edit, and/or negotiate the terms of your contract. This can help minimize the risks associated with entering into a contract, and may help to prevent a legal dispute over contract terms in the future.

You should also speak with a lawyer if you want to sue or are being sued for breach of contract. An attorney can help you prepare your case, determine whether any defenses or remedies are available, and will also be able to represent you in court, as needed.