How can I ensure my business contracts are legally binding?

business contract

Oct 13, 2016

Contracts are an essential tool for businesses. They are documents that will protect your business and reduce your legal risk. There are many types of contracts you may use over the course of doing business with both employees, clients and contractors.

Through the protection of a legally binding contract, you can be at ease knowing your business and its assets are protected. How do ensure that your business contracts are legally binding?

Legally binding contracts

There are a number key elements that must be covered in order for a contract to be legally binding, your contracts must include:

  • Agreement
    • A parties offer is accepted by another party – offer of acceptance
  • Legality
    • Must not include illegal obligations
  • Consideration
    • Monetary or word of mouth
  • Capacity
    • Sound of mind, parties are of age of majority


A contract is considered binding and enforceable when the parties involved have mutually agreed and accepted the terms of the agreement. The agreement stage of a contract may involve offers and counter offers and can be written or oral in state. Once an agreement of the terms and conditions of a contract are met, the contract itself can be drawn up.


Consideration refers directly to the considerations each party must give in order for a contract to be valid. The consideration can be thought of as the ‘value’ each party is bringing to the agreement and typically involves parties exchanging a product or service for monetary compensation.

Certainty of terms:

A legally binding contract will include clear terms in which both parties understand the meaning. Terms need to be specific and leave no uncertain doubt.

Things to include in contracts for your benefit

While every contract varies, as does it’s purpose, there are a number of details and provisions that should be afforded in every contract.

  • Mutually agreeing parties and their signatures
  • Cost and payment terms
  • Detailed outline of goods or services
  • Terms and conditions

The contractual agreement that you or your lawyer drafts for your business will lay out your obligations in respect to the terms listed. It’s important that you understand the terms in the contracts you sign and draft, and that you read, understand and retain legal advisement in relation to the contract. Protect your Niagara business, connect with a Niagara business lawyer below. 

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