South Jordan, UT Contract Law Basics: What Every Business Owner Should Know
Utah Contract Law Basics Every Business Owner Should Know
Utah contract law is governed by state common law and the Uniform Commercial Code (UCC). The UCC applies to contracts for the sale of goods. Utah common law governs contracts for services, including real estate, finance, insurance, employment, and any other agreements not covered by the UCC.
If you’re a business owner in Utah, chances are you deal with contracts every day, whether it’s with customers, vendors, or business partners. However, not all agreements are created equal. Utah common law has far stricter requirements than the UCC when it comes to contract formation and validity. That’s why it’s important to understand what makes a contract legally valid in Utah, the differences between verbal and written agreements, and the deadlines for filing a claim in the event of a breach of contract.
What makes a valid Contract in Utah?
The purpose of contract law is to define which promises are enforceable and to establish the obligations and rights of the parties involved. In Utah, for a contract to be legally binding, it must include the following essential elements.
- Offer: One party must make a clear and definite offer, proposing specific terms.
- Acceptance: The other party must agree to those exact terms clearly and definitely. There cannot be a counteroffer.
- Exchange something of value: Each party must provide something of value (known as consideration). This could be an exchange of money, services, or a promise to do something or omit to do something.
- Mutual Assent (meeting of the minds): Both parties are in mutual agreement about the terms and intend to be legally bound by them.
The combination of offer and acceptance creates mutual agreement or mutual assent. For a contract to be enforceable, it must also involve a legal purpose, and all parties must have the legal capacity to enter into the agreement.
The enforceability of a contract also depends on many other factors. Generally, contracts must be formed by competent parties who voluntarily agree to the terms. In certain situations, a contract must be in writing to be valid.
- Legal Purpose: This means the contract cannot be formed for an illegal purpose or against public policy.
- Capacity: Both parties must be of legal age and mentally competent to understand the terms they’re agreeing to. They must enter into the contract voluntarily without duress, coercion, or undue influence.
If you want to ensure your contract is fully enforceable, it’s a good idea to work with an experienced business attorney. They can review the agreement before you sign it to make sure all terms are clear and legally binding.
When a written contract is required?
In Utah, verbal agreements can be legally binding contracts. However, certain types of agreements, such as real estate deals or contracts that can’t be completed within a year must be in writing under Utah Code Section 25-5-1, known as the Statute of Frauds. The UCC requires contracts for the sale of goods that cost over $500 to be in writing.
What are Utah’s statutes of limitations for contracts?
In Utah, the statute of limitations for contract breaches is four years for verbal agreements and six years for written contracts. It’s crucial to file your lawsuit within this timeframe, as failing to do so could bar your claim. Keep in mind, though, that the other party can raise the time bar issue as a defense for the court to dismiss your case.
Contact a South Jordan, Utah Business Law Attorney Today
Working with an experienced Utah business law attorney helps ensure your contract is legally sound and includes all the essential terms before you sign.If you’re unsure about whether a written contract is necessary or need help drafting one, I’m here to help. At Watts Law, I’ve been serving the South Jordan business community for over 20 years, guiding clients through all aspects of contract law.
Give me a call at (801) 630-8309 or use the online form to schedule your free consultation.