With Austin and other parts of Texas currently enjoying a growth-friendly business climate, the need for well-written, comprehensive contracts is on the rise. An ambiguous or poorly drafted contract could prove disastrous for a company.

If you are thinking of signing any sort of business agreement, then it’s a good idea to first get some feedback from a contract lawyer. With that in mind, let’s consider the basic legal elements of a contract.

Under Texas law, a binding contract typically consists of six essential elements:

• Offer and acceptance
• A legal purpose for the contract
• Mutual assent
• Sufficiently defined terms
• “Consideration”
• Competent, authorized parties to the contract

Offer and Acceptance

A contractual offer must be based on someone’s willingness to enter into a bargain, and the other party’s acceptance of the offer must not alter the offer’s terms. If acceptance changes the terms of the offer, then the offer has been rejected, or a change in the contract constitutes a counteroffer.

Legal Purpose

A contract can be legally binding only if its purpose is legal. You could not, for example, enforce a contract whose purpose is to bargain for illegal drugs or weapons.

Mutual Assent

For a contract to be enforceable, both parties must express mutual approval of the terms. This essential aspect of a contract is also sometimes called the “meeting of the minds.” Mutual assent means that both parties understand and agree to the terms of the contract. Determining mutual assent is based on what the parties said and did, not on their subjective intent.

In other words, the meeting of the minds is most effectively established in writing.

Sufficiently Defined Terms

A contract is not legally binding unless its terms are clearly defined, and courts are not able to create contracts where none exist. Keep in mind, too, that an ambiguous contract may have unforeseen consequences that negatively affect your business in years to come. A contract lawyer can help you avoid unwanted surprises.

Another important point: if you agree with someone else to negotiate a contract later, then that agreement is generally not an enforceable contract itself.

Consideration

In contract law, a consideration clause essentially establishes a relationship between you and the party with whom you’re contracting. “Consideration” refers to the “benefit to the promisor or a detriment to the promisee.”

Additionally, Texas case law has established that a monetary consideration is not necessary for a contract to be enforceable, but of course contracts frequently involve monetary considerations.

Competent Parties

Lastly, a binding contract must involve parties who are competent and authorized to enter into a contractual agreement.

Protect your interests by getting legal advice.

Your business contract should be developed specifically for your business, and cheap Internet-vended forms often prove to be more trouble than they’re worth. A contract lawyer can draft a contract that meets your business’ specific needs. For more on these matters, please see Slater Pugh Ltd. LLP’s overview of contract disputes.

With solid employment numbers and a high economic growth rate, Austin’s housing market is on track to break records this year. The Austin Board of Realtors reports that on average the price of a single-family home was $333,452 in October 2015. That price represents a 7-percent increase from the same time last year.

While this is all good news, higher home prices mean higher commissions for realtors, and sometimes homeowners look back on their residential real estate transactions and wonder whether a realtor was needed at all. Could that heavy cost have been avoided?

If you’re able to find your own home to purchase, then you may not need help from a realtor, but you do need to cover your legal bases.

In some cases, a realtor’s 6-percent cut can come to tens of thousands of dollars that, with the right legal help, could have been saved. If you’re buying a house at the current average price in Austin — $333,452 — then you may end up paying a realtor a 6-percent commission of $20,000. At the same rate, the realtor would get $60,000 if the home is priced at $1 million.

Don’t leave money on the table. Let a real estate law attorney help save you money and protect you from legal pitfalls and financial harm.

The reality is that the traditional home-buying process is not the best option for all homebuyers, and a realtor-free transaction may be the best way to minimize costs and maximize the deal.

At Slater Pugh Ltd. LLP, our real estate transaction attorneys provide advice and representation to homebuyers and home sellers. Our services include:

• Drafting contracts, including offer letters and purchase agreements
• Negotiating prices
• Handling inspections, title-related matters, financing and closings

To learn more about a transactional strategy that is often more cost-effective than the traditional home-buying process, please see our real estate law overview.

Texas is known as being one of the most difficult states to collect debts in. Even if you went to court to obtain a judgment against a debtor, then you may still encounter difficulties in actually turning the judgment into money, especially if you’re in another state and trying to collect in Texas.

The reality is that federal and state laws tightly restrict the actions debt collectors can take, but with the right legal help, you can still collect what is rightfully yours in an ethical and professional manner.

To collect from an elusive or uncooperative debtor, it is crucial that you know what is permitted and what is not permitted by law.

In Texas, engaging in prohibited debt collection practices can result in civil and criminal penalties. To protect yourself and your business, speak with an experienced debt collection attorney before taking action.

The Fair Debt Collection Practices Act is the federal law that establishes guidelines for what is and what is not acceptable in debt collection efforts. This law only covers collectors who have been hired by debt collection agencies and lawyers who have been hired to collect a debt. Texas laws are broader in reach.

The Texas state laws that restrict creditor actions are the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act. These statutes apply not only to collection agencies and lawyers, but also to anyone who is trying to collect a debt.

What communication rules should creditors be concerned about when trying to collect a debt?

The state and federal laws are similar in that they generally prohibit abusive, harassing and fraudulent collection practices. Creditors may also encounter legal trouble with regard to how and when they communicate with debtors. The law specifies the time and manner in which a debtor can be contacted. For example, collection-related phone calls should generally not be made before 8 a.m. or after 9 p.m., unless those before- and after-hours times are known to be more convenient for the debtor.

Consumer protection laws also control the manner in which creditors can acquire location information about debtors. For example, in efforts to obtain a debtor’s location information from someone other than the debtor, a collector is not allowed to:

• Send a post card
• Communicate more than once with the third party unless the debtor requests otherwise, or unless the information provided by the third party is believed to be incomplete or erroneous
• Indicate in the communication with the third party that the collector is a collector or that the communication relates to debt collection

For more information about legal issues related to collecting debts in Texas, please see Slater Pugh, Ltd. LLP’s overview of commercial debt collection.

Even as other parts of the country have struggled with economic shifts and downturns, Texas has long been a top promoter of business growth. In fact, a recent study by the finance company WalletHub ranked the City of Austin’s economy as the fastest-growing among large cities in the United States.

Among big cities, Fort Worth and Corpus Christi also came in the top five, and in the rankings of cities of any size, nine of the top 10, including Round Rock, are Texas cities. The study looked at economic growth in more than 500 communities since the start of the recession in 2008.

Colleges and universities in Texas are also doing their part to lay the groundwork for business growth.

In addition to the high performance of city economies, business schools throughout Texas continue to be outstanding on a global scale. Recently, a report from Financial Times ranked University of Texas at Austin, Rice University, Southern Methodist University, Texas A&M and University of Houston among the top international business schools worldwide.

The rankings are based on salaries of alumni three years after graduating.

Whether you’re just starting out or you’re a seasoned business owner, you can minimize risk and avoid losses by creating the right business structure and drafting solid, comprehensive contracts.

As a business owner, you want to stay in the positive. That means protecting your company from unwanted surprises while you focus on growth and operations. You want to do things right the first time, and you don’t want to lack proper legal counsel when you form a business and start signing contracts. The risk of loss is too great not to cover your legal bases.

At Slater Pugh, Ltd. LLP, we know the high importance of setting up your company with the appropriate structure and drafting contracts that are specific to your business. We are business-focused, deal-savvy lawyers with a strong record of success throughout Texas.

Our firm overview provides some insight into our areas of practice, our philosophyand the kinds of services we provide.