If you are starting or buying a small business, you should know a thing or two about contracts. A contract is an agreement between two or more parties, creating an obligation for a specific task. Every contract must have parties to it, terms, a commencement date, obligations and repercussions in the event of breach. A contract is formed when one party offers to do something, the second party accepts the offer, and something of value is traded in order to support the promise that was made. Each party that is involved is responsible for fulfilling the terms of the contract.
A breach of contract occurs when one party fails to perform any term of a contract without a legal excuse. A breach may occur when a party: refuses to perform the contract, does something that the contract prohibits or prevents the other party from performing its obligations.
With that being said, before you put your pen to the paper make sure you have read the fine print on a contract. Make sure you are willing to comply with the demands that are made and you are able to meet the terms of the contract.
People often enter into contracts without even having understood the terms and find themselves in a challenging situation when they fail to meet their contractual obligations. It is important to understand the fine print between lines in order to protect yourself from legal disputes related to meeting the terms of a contract.