What Makes a Contract Valid in Utah?

Contracts are the foundation of nearly all business transactions in Utah. Whether you are leasing a space for your business, hiring a supplier, or recruiting employees, contracts define the rights and obligations of each party entering into the agreement to ensure that mutual promises are kept. Contract laws in Utah are meant to ensure that promises are honored and to protect against ambiguous or unfair agreements.

The parties who enter into contracts can only rely on them if they are enforceable, however. Below, one of our Utah business law attorneys outlines the components all contracts need to ensure they are upheld.

The Offer 

An offer is a specific and clear proposal made by one party to someone else. Offers should be very clear so they cannot be misinterpreted and they should be clearly communicated to the other party entering into the contract. Ambiguous or hidden offers can cause disputes over whether an offer was even made.

The Acceptance

The acceptance is a clear and specific agreement to the offer. To accept, one party must accept the terms of the offer exactly as they are proposed. Any modification of the terms or deviation from the original offer is a counter-offer, and not an acceptance.

The Consideration

Consideration in a contract is the exchange of value between two parties. Each party typically provides something of value or gives something up, such as monetary payments or services. Consideration is required in all Utah contracts and without it, an agreement is not legally enforceable. Consideration does not have to be of equal value. The courts primarily focus on whether consideration existed and not the actual value. When there is no consideration, anything contributed by any party is considered a gift.

The Capacity

Each party entering into a contract must have the legal and mental capacity to do so. This means they must fully understand the terms of the agreement and the implications of entering into it.

The Legal Purpose

Contracts can only exist for legal purposes, meaning that the agreement cannot violate any laws or public policy. For example, an employment contract that provides less than the minimum wage may not be enforceable because this violates an employee’s statutory rights.

The Meeting of the Minds

The meeting of the minds, formally known as mutual assent, means that all parties entering into the agreement understand the terms and conditions of the contract and know what they are agreeing to.

The Terms 

For the courts to enforce a contract, the agreement must include terms that are specific and clear. Without clear terms that specifically outline the rights and responsibilities of each party, the courts may not enforce the contract.

Our Business Law Attorneys in Utah Can Draft Your Contract 

Whether you are recruiting new employees, hiring new vendors, or otherwise need a clear and enforceable contract, our Utah business law attorneys can help. At AGS Law, our experienced attorney knows the terms and language to include to ensure the courts will enforce your agreements and that your rights are protected. Call us today at 801-477-6144 or contact us online to schedule a consultation and to get the legal help you need.

Source:

le.utah.gov/xcode/Title15/C15_1800010118000101.pdf