Contracts: Making a contract that will hold up in court

You can make a contract with just about anyone for just about anything. Not every agreement you make qualifies as a contract, however. To be a contract, an agreement must provide that something of value be received by both parties involved. Generally, one party offers to pay money in return for which the other party will give up certain goods or perform a service.

The words in a contract should leave no doubt as to what both parties are to do. If you suggest a change in the terms after they have been agreed upon, the change is binding only if the other party agrees to it. If both of you shake hands on a deal, but leave an important term, such as price or quantity, open until later, you have nothing but an “agreement to agree,” which is legally worthless.

You don’t have to put a contract in writing unless a state law specifically requires it, but doing so protects you against later trouble. Generally, state laws require that contracts for land, for goods over $500, and for long term employment be in writing.

Caution: Get your lawyer to advise you on the best ways to protect your interests when you make an important contract.

Read a contract-particularly the fine print-carefully before you sign on the dotted line. The courts won’t help you if you’re careless in making a deal. But if the other party unfairly exploits or tricks you, a court might help if you can prove that you were duped.

Don’t make a contract with a minor (usually under age 18) or someone with a mental disability. Their legal representatives can cancel the contract as long as they return anything received under it.

If the other party fails to fulfill the terms of your contract, there’s a breach of it. Try to work out a mutually satisfying solution outside of court, perhaps with a lawyer’s help. If you can’t find a solution, ask a court to cancel the contract, to give you money (called damages) to compensate for your losses, or to order that the contract be performed if there’s no reasonable substitute for what was to be done.