Business Contract Attorneys
in Broomfield, Colorado

When does a handshake agreement between two parties become a contract? Does every agreement or contract need to be in writing?  What if one party to a contract fails to live up to the agreement? 

In the commercial world, agreements and contracts are a daily necessity. Manufacturers need suppliers of materials or parts. Merchants need goods to sell to consumers. Employers need set rules and obligations for their employees.

Colorado, like every other state, has adopted much of the Uniform Commercial Code (UCC) that was created in 1952 with the aim of standardizing laws concerning commercial transactions and contracts.

If you need help drafting a contract, understanding the provisions of a contract you’re about to sign, or solving a dispute in or around Nederland or Broomfield, Colorado, contact us at The Law Offices of Daniel T. Goodwin. Our commercial contract attorneys can assess your situation, needs, and concerns, and help you reach the best available outcome.

What Constitutes a Contract in Colorado?

Colorado law defines a contract as “an agreement between two or more persons or entities. A contract consists of an offer and an acceptance of that offer and must be supported by consideration. If any one of these three elements is missing, there is no contract.”

Suppose Company A manufactures parts for drones, and Company B assembles drones for sale. Company A offers to supply the computer chips necessary to fly Company B’s drones, and B agrees. You thus have both offer and acceptance of the offer. What is compensation? Company B agrees to pay a set dollar amount for each chip to Company A, and this constitutes consideration. The two companies now have a contract.

Does it have to be in writing? Not necessarily, but almost every attorney will tell you to get it in writing — and for good reason.

The agreement can become one of three types of contracts. It can remain simply an oral contract, basically a handshake and a spoken commitment by each party. It can be written, even if either Company A or Company B’s representative just writes down the details on a page of notebook paper and hands it to the other party. It can become implied if the two companies continue the relationship over time with nothing in writing or perhaps nothing more than a phone call to initiate the whole transactional history.

The best approach, of course, is to get every detail of the offer, acceptance, and consideration in an attorney-reviewed business contract, which is where our team at The Law Offices of Daniel T. Goodwin can help you immensely.

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What Happens if One Party
Doesn’t Live Up to the Contract?

Suppose Company A doesn’t deliver enough chips as needed by Company B to meet its sales targets, or it delivers them too late in the production cycle to reach the market on time. What recourse does Company B have? This is where the old saying “the devil is in the details” comes in. With a properly written and detailed business contract in place, both deadlines and quantities would be clearly specified, along with the consideration (i.e., price).

If all details are spelled out, Company B could have a breach of contract dispute with Company A. The four elements of a breach of contract are:

  • The existence of a contract
  • Continued performance on the plaintiff’s part, or in Colorado law terms, “substantial performance” of its obligations
  • Failure to perform up to the contract by the defendant
  • Resulting loss or damages to the plaintiff

In our hypothetical case, Company B would have to show that it continued throughout the contract to substantially comply with its “essential obligations,” meaning it has paid the agreed-upon price for Company A for the delivery of the chips. Company A, of course, could argue that it has also substantially met its “essential obligations” by delivering partial orders due to unexpected manufacturing difficulties, with the promise of making up the difference in a reasonable amount of time.

As you can see, things can get complicated if business contract disputes go to court. If Company B prevails, it could be awarded a sum that would “place them in the same position they would have occupied had the breach not occurred.” Alternatively, Company A could be ordered to live up to the “specific performance” required in the contract.

Contract Dispute Resolution Options

Not every real or perceived breach needs to go to court. The most logical first step is negotiation, which the two parties can undertake on their own, or they can enlist attorneys to negotiate for them.

If negotiations fail to resolve the matter, outside mediation or binding arbitration might be invoked. Resolution tools should be included in the written contract, so costly court appearances can be minimized or avoided altogether. Again, this is why these business contracts need to go through a qualified and experienced contract attorney.

Get Help from Experienced Attorneys

For more than four decades, our team at The Law Offices of Daniel T. Goodwin has counseled hundreds of clients on each aspect of contracts and contract disputes. We can help you draft contracts that spell out obligations, deadlines, dispute resolution procedures, and everything else to put a legally sound agreement in place.

Business Contract
Attorneys Serving Nederland
& Broomfield, Colorado

If you need legal representation in matters involving business contracts in Nederland, Broomfield, or the surrounding Front Range areas as well as the Peak-to-Peak region of Colorado, contact us at The Law Offices of Daniel T. Goodwin. We will take time to consult with you to understand your situation and take the right steps toward the most favorable outcome available.