Frequently Asked Questions About Contract Formation in Commercial Law

Commercial industries, construction firms, and other forms of corporations or business entities are regulated and largely organized by contracts of various types. Since a contract needs to be thorough and should be drafted to be legally sound, most are intricate, often to the point where the content of the contract becomes difficult to interpret. Business veterans and new entrepreneurs alike can be stumped by a contract or, even worse, inadvertently violate a contract’s requirements and end up in a legally compromising situation.

If you work within or manage a commercial or construction company, it is important for you to do everything you can to understand how contracts are formed and approved. Gaining this knowledge should help you stay out of serious conflicts that could jeopardize your business, finances, and reputation. Our team of Marietta construction litigation attorneys at Busch, Reed, Jones & Leeper, P.C. have prepared a quick and helpful list of frequently asked questions about contract formation. Please give it a review to brush up on your knowledge. If you know that you need the assistance of our lawyers for a case of your own, do not hesitate to contact us to set up a free consultation at your first opportunity.

Contract Formation FAQ

  • Does a legally binding contract exist if it is never signed yet work is carried out according to its clauses?
    • If a contractor or subcontractor starts a project based on the requirements or demands of an unsigned contract, it is possible that a court will see that contract as official, even with the lack of signatures. Even when the contract clearly defines that signatures are necessary to make it binding, if the work is started or completed, there is a high chance the contract was “signed” by virtue of work performance alone.
  • How long can someone file a lawsuit for a contract violation in Georgia?
    • Georgia has a fairly lenient statute of limitations when it comes to contract violation lawsuits. For written contracts, the limit is a full 6 years after the contract was violated, or after violations were reasonably noticeable. This statute will most likely also apply to unsigned commercial contracts that were carried out. Oral contracts have a 4-year statute of limitations for litigation and lawsuits.
  • What constitutes an oral contract in commercial and construction litigation?
    • If two parties have a discussion regarding work and compensation for that work, it might be seen as an oral contract, especially if that work is consequently started. Evidence of such discussions will further validate the presence of an oral contract having formed. Whenever you talk about work with contractors or subcontractors, you may want to record the audio – after notifying all parties present about the recording in progress – in case you have to argue for the existence of an oral contract later.
  • If a party begins work that was never fully agreed upon in a written or oral contract, does a contract exist anyway?
    • It would be unusual for a court to find that a contract exists in a circumstance where it should have been clear to a reasonable party that the design, purpose, or scale of the work was never finalized and therefore should not have begun. Many cases such as this are open to interpretation and a ruling judge’s or administrator’s discretion. Working with a construction or commercial litigation attorneys is always recommended to protect your best interests and finances.

Remember: You can turn to our business litigation attorneys in Marietta if you require legal guidance when dealing with a contract issue. Our law firm is always available to hear from new and returning clients. Just fill out an online contact form to request a complimentary case evaluation and we will get back to you as soon as we can.

Categories: