When two or more people strike a bargain, and each party to the agreement promises to give something up in order to get something else in return, those individuals have created what is known as a contract. Contract lawyers specialize in dealing with the legal issues associated with the creation, negotiation and enforcement of contracts, and they sometimes get involved with litigation when the parties who made a contract later disagree about how that contract should be interpreted or enforced.
Contracts shape many aspects of everyday life, including the relationships between employees and their employers. Contracts govern commercial transactions such as leases, mortgages, personal loans, credit card agreements and car purchases, and even intimate personal relationships such as prenuptial or custodial agreements and divorce settlements. Multimillion-dollar business deals, including corporate mergers and acquisitions, nearly always rely upon contract law.
Aspiring contract lawyers can learn more about this career path by reading this guide.
What Is Contract Law? A Definition
Contract law typically focuses on ensuring that people honor the commitments they make to others. It is also designed to guarantee that deals between people are fair and transparent. Generally, if someone who agrees to a contract either orally or in writing is later unable or unwilling to keep his or her word, he or she is obligated to pay a penalty that may be monetary for failure to perform their legal duty.
However, there are important exceptions to this rule, such as if a judge deems a contract to be inherently inequitable and legally unenforceable or concludes that a contract was deliberately crafted in a deceptive way and rules against the dishonest party. There are also occasions where certain types of contract provisions are specifically forbidden by a law or regulation, which means that any contract that contains these provisions is subject to legal scrutiny.
In addition, extraordinary circumstances that make it difficult for a contract to be carried out may result in legal allowances for the inconvenienced parties. For example, during the coronavirus pandemic, lawmakers in many places in the U.S. have temporarily paused tenant evictions by landlords in situations where tenants are unable to pay their rent due to the pandemic-associated economic downturn.
“The goal of a contract is to clearly lay out the rights and responsibilities of the parties while also allowing enough flexibility for life to happen and taking into account industry standards and public policy; contracts should be drafted to avoid disputes,” Falen O. Cox, a founding partner with the Cox, Rodman & Middleton law firm in Georgia, explained in an email. “In the event that a dispute arises, good contracts will clearly spell out what happens next and what should be expected.”
Michael Romano, an Oregon-based attorney with more than two decades of experience, says the knowledge that a contract exists is usually enough to motivate the people who signed it to comply with it.
“Indeed, the reason that people in business even have contracts, is that they prefer to attempt to craft the terms of conduct between themselves — and resolve disputes between themselves — rather than to have a judge rule in a manner which may be unknown and unpredictable,” Romano wrote in an email. “This is why you will even see very specific terms for what are called ‘liquidated damages.’ That is, damages that the parties have already agreed to prior to either party breaching the contract.”
Basic Terms to Know in Contract Law
In addition to the term contract, attorneys who specialize in contract law say that the following concepts are among the most important within their field:
— Consideration. The concession each party agrees to make in exchange for what they want. Typically, in order for a contract to be valid, every party must give something in order to get something.
— Offer. The agreement terms that one party proposes and the other party has the opportunity to review and comment on.
— Negotiation. The debate and give-and-take between parties involved.
— Acceptance. Formal approval of a proposed deal and agreement to its terms.
— Breach. A failure to fulfill either the spirit or letter of a contract.
— Severability. When one part of a contract can be deemed unenforceable but the rest of the contract can remain in force.
— Arbitration clause. Agreement that any contract dispute will be referred to an arbitrator as opposed to a judge, which is intended to to reduce the cost and length of potential litigation.
What to Look for in a Law School if You Want to Be a Contract Lawyer
Because contract law is typically a required course in J.D. programs, the existence of such a class is not a differentiator between law schools, says Robert C. Bird, a professor of business law with the University of Connecticut School of Business.
However, other types of advanced elective courses can be helpful for aspiring contract lawyers, such as contract-related courses taught by highly regarded contract attorneys or law school clinics that focus on contracts, Bird says. He advises aspiring contract lawyers to sit in on a first-year contract law class at their target law school so they can gauge whether the class is good.
What Contract Lawyers Do and What Skills Their Job Requires
Experts on contract law say there are two kinds of contract attorneys: those who specialize in crafting contracts and those who represent clients in contract disputes.
Reiko Feaver, a Georgia-based partner with the Culhane Meadows PLLC corporate law firm who has significant experience as a transactional attorney, says that practicing the transactional form of contract law requires significant foresight.
Transactional contract attorneys need to anticipate potential worst-case scenarios, Feaver explains. They need to understand what issues could prevent a contract from being executed as planned, and they need to incorporate that understanding into the way a contract is written by outlining what will happen if disaster strikes, says Feaver, who deals with a variety of commercial transactions, including many that relate to privacy or technology.
Feaver adds that transactional contract attorneys need to be exceptional negotiators who can ensure that their client gets a good deal even if the opposing counsel is skillful.
Contract litigators need to be precise, but they also need to be exemplary big-picture thinkers, says John Arrastia, a shareholder within the Genovese Joblove & Battista business litigation boutique law firm in Florida. Arrastia says that his contract litigation practice requires him to understand the details of a contract and appreciate the intricacy of its various clauses. However, being detail-oriented is not sufficient to be a good contract lawyer, Arrastia says, adding that it is crucial to know a contract’s specific purpose and to think about how its clauses tie into its overall goal.
Job Prospects for Contract Lawyers and Why Contract Law Matters
Salaries within the contract law field are highly dependent on a lawyer’s employer, and those who work for large law firms or who hold in-house counsel positions at major corporations tend to be compensated more highly, experts say.
Contract attorneys say that their field of law is necessary for society to function and flourish, which means that there will always be demand for them.
“Using the wrong contract can lead to problems down the road, so understanding the moving parts of a business deal and orchestrating them into a suitable ‘form, fit, and function’ can mean the difference between a smooth success or a catastrophic failure (think: multi-year lawsuits, bankruptcy, losing your house, etc.),” South Carolina attorney Alexandru Juncu wrote in an email. “Of course, incomplete or ‘casual’ deals happen every day. Unfortunately, a great many of them regularly go awry because certain aspects were misunderstood, incorrectly documented, or simply ignored.”
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What Contract Law Is and How to Become a Contract Lawyer originally appeared on usnews.com