347-787-6824Contracts are the backbone of every successful business. Whether you’re running a startup, managing a corporation, or operating a small business in New York City, understanding business law contracts is essential. A well-drafted contract protects your rights, prevents disputes, and ensures smooth business operations.
At the LAW FIRM OF DAYREL SEWELL, PLLC, our experienced business law attorneys, commercial contract lawyers, and corporate litigation professionals help businesses create, review, negotiate, and enforce legally sound contracts tailored to their needs.
What Is a Contract in Business Law?
A contract in business law is a legally binding agreement between two or more parties that governs commercial transactions, business relationships, and professional obligations. It outlines the rights, responsibilities, and expectations of each party, ensuring that business activities are conducted fairly, transparently, and with legal protection.
Key Features of a Contract in Business Law
- Legally Enforceable – If a party fails to perform, the other party can seek legal remedies such as damages or specific performance.
- Clear Terms and Conditions – These specify pricing, timelines, deliverables, payment terms, dispute resolution, and other relevant details.
- Mutual Agreement – All parties must willingly agree to the terms.
- Consideration – Something of value (money, service, goods) must be exchanged.
- Purpose Must Be Legal – A contract cannot involve illegal activities.
Source: Fetterman Law
Types of Contracts in Business Law
In business law, contracts are classified based on several factors, including their formation, validity, and performance. Understanding these categories helps businesses operate smoothly, avoid disputes, and ensure legal compliance.
1. Based on Formation
1.1 Express Contracts
These contracts have clearly stated terms, either written or spoken. Businesses commonly use express contracts for employment agreements, service contracts, leases, and vendor agreements.
1.2 Implied Contracts
Created through actions or circumstances, not written words. For example, hiring a freelancer through conduct or purchasing items by behavior at a self-checkout.
1.3 Quasi-Contracts (Implied-in-Law)
Not true contracts, but obligations imposed by courts to prevent unjust enrichment. Example: A business mistakenly receives services and must pay reasonable compensation.
1.4 E-Contracts
Digital or electronic contracts are executed through emails, online forms, software agreements, or e-commerce platforms.
1.5 Unilateral Contracts
Only one party makes a promise. The contract is formed once the other party performs the required act (e.g., reward offers).
1.6 Bilateral Contracts
Both parties exchange promises; most business contracts are bilateral (service-for-payment agreements).
2. Based on Validity / Enforceability
2.1 Valid Contracts
Legally binding and enforceable, containing all essential elements of a contract.
2.2 Void Contracts
Not enforceable by law. These contracts may appear valid initially, but become void due to illegality, impossibility, or public policy conflicts.
2.3 Voidable Contracts
Enforceable unless one party elects to void them due to reasons like undue influence, fraud, misrepresentation, or minority.
2.4 Illegal Contracts
Agreements involving illegal activities are automatically void and cannot be enforced.
2.5 Unenforceable Contracts
Appear valid but lack enforceability due to technical reasons (e.g., lack of written format under the Statute of Frauds).
3. Based on Performance
3.1 Executed Contracts
Fully performed by all parties. Example: A one-time service completed and paid for.
3.2 Executory Contracts
Still awaiting performance by one or both parties—most business agreements fall under this category until fully completed.
3.3 Partly Executed / Partly Executory Contracts
One party has performed its part, while the other still has obligations pending.
4. Additional Types of Business Contracts
4.1 Adhesion Contracts
Standard “take-it-or-leave-it” contracts where one party has more bargaining power (e.g., website terms, insurance policies).
4.2 Aleatory Contracts
Performance depends on uncertain events, like insurance contracts or speculative business agreements.
4.3 Option Contracts
One party pays for the right to enter into another contract later (e.g., real estate options).
4.4 Lump-Sum / Fixed-Price Contracts
Common in construction and business operations, where a fixed price is agreed upon regardless of cost variations.
Source: ezyLegal
Why Choose LAW FIRM OF DAYREL SEWELL, PLLC?
As one of New York City’s leading business law firms, the LAW FIRM OF DAYREL SEWELL, PLLC offers:
- Deep expertise in business law and contract drafting
- Skilled commercial litigation attorneys
- Personalized, client-focused service
- Strategic contract negotiation
- Proven success in dispute resolution
- Comprehensive support for businesses of all sizes
Our mission is to ensure your business operates safely, efficiently, and with full legal protection.
Final Thoughts
Contracts are essential tools for protecting your business, building strong partnerships, and ensuring operational stability. Understanding business law contracts empowers you to make smarter decisions and avoid legal pitfalls.
The LAW FIRM OF DAYREL SEWELL, PLLC, stands ready to assist with all your contract needs from drafting and negotiation to litigation and enforcement. Whether you’re launching a startup or managing a large enterprise, our attorneys ensure your contracts are strong, enforceable, and aligned with your business goals.
FAQs
1. Why do businesses need contracts?
Contracts prevent misunderstandings, protect legal rights, define expectations, and provide enforceable remedies when disputes arise.
2. What happens if a contract is breached?
The non-breaching party may seek damages, mediation, termination, or legal action, depending on the contract terms.
3. Who can draft a business contract?
While anyone can draft a contract, only an experienced business law attorney can ensure it is legally sound, enforceable, and free of loopholes.
4. How can LAW FIRM OF DAYREL SEWELL, PLLC help with contracts?
Our attorneys draft, review, negotiate, and enforce contracts while offering expert guidance in business law and commercial litigation.
