What makes a contract legally binding?
If 2 business owners create a contract, are their signatures enough to make it a binding agreement or would getting the contract notarized be a wiser decision? Thanks for all feedback...
A contract is legally binding when it has the following elements:
1.Consideration - An exchange of value between the parties. If one party doesn't provide consideration, the other party can't enforce the contract.
2. Offer and acceptance - The offer must be lawful, and the acceptance must be expressed, either orally or in writing.
3. Capacity - The parties must intend to engage in a legal relationship and be legally bound by it. This intention can be expressed by the parties or implied by their actions.
I would say that the signatures of both parties would suffice. However, as an added step of security and a "just in case", I would get them notarized. If its a few documents, I don't see why a notary would charge you more than $150. If you are worried of something happening down the road, get a notary for peace of mind.
@Michael L. While there is no harm in getting a contract notarized, I have never bothered with hundreds of contracts under my belt.
In addition to what @Manny Vasquez said, which is correct, Capacity includeds the age and abilty to enter into a contract. Someone under legal age or without the mental capacity to make a decision regarding a contract cannot legally be bound to a contract.
Acceptance of a contract can be verbal but that is harder to prove. Also Real Estate Contracts MUST be in writing. There is no such thing as a verbal real estate contract
@Ned Carey, thanks for your input and clarity.
@Manny Vasquez, thank you kindly for the great breakdown.