Contract Enforceability
Oral Agreements
Contrary to popular belief, oral agreements are no less valid than written agreements (although in some cases the Statute of Frauds requires a written agreement). As discussed on the contract formation page, a valid contract exists if there is:
- Offer
- Acceptance
- Consideration
So, a legally enforaceable agreement exists even if the offer and acceptance are given by oral promises, via text message or email, or even handwritten agreements on a napkin. The issue in these scenarios is not whether the agreement is enforceable, but rather proving that the promise was made. It is pretty easy to deny that an oral promise was given or that an email was actually sent by the person purported to have sent it. So the issue is really a practical one rather than a legal one.
When Is A Contract Or Clause Not Enforceable?
There are a number of times when a contract or a specific clause is not enforceable - usually because the courts have determined that it is against public policy. There are way too many issues to give an exhaustive list of unenforceable contract clauses and reasons a court may refuse to enforce a contract as a whole, but here are some that are common:
- Lack of Capacity
Minors, the aged, infirmed, mentally handicapped - these, among others, are all issues that prevent enforcement of a contract. Essentially, the law requires that a person have the mental capacity to understand the agreement and its implications. That is not, however, to say that a person necessarily needs to understand the contract in question, but only that the person has the capacity to understand.
- Duress
As you likely imagined, a person that is "forced," either expressly or impliedly, to enter a contract can defend its enforcement on the grounds of duress. Common examples include threats of violence and blackmail.
- Undue Influence
A close cousin to duress, undue influence is typically based upon a special relationship between the parties. Unfortunately, this is all too common among the elderly, where a caretaker or other trusted person exerts influence over the person and induces them to enter into an agreement - usually an unfavorable one.
- Against Public Policy
Certain contracts or clauses are simply held to be invalid because they violate public policy (ie they represent a harm to the public as a whole). That isn't to say that a particular contract, if enforced, will harm the public, but courts may refuse to enforce it because those clauses as a whole represent a harm to the public. For example, a contract forbidding an employee from taking medical leave; a tenant from using a seeing eye dog; a parent from providing for its child; etc... Often there are laws specifically forbidding the enforcement of such clauses, but there are also many clauses held to be against public policy even when there is no specific law forbidding it. An issue we have dealth with often is when a business makes a customer sign a waiver that purports to absolve or release the business from liability even for the business's own acts of negligence. These types of clauses have largely been held invalid, especially when a parent is prospectively limiting or releasing potential future claims of its child.
If you have entered into an agreement and need to determine if there are grounds to have it invalided or if you need to ensure your contract will be enforceable, contact the breach of contract attorneys at Johnson, Tabor & Johnson Law today for a free consultation at 402-506-4444.
