Contract Law in Michigan
In Michigan, contract law specifically refers to the set of laws that govern the formation, execution and breach of contracts, which are legally enforceable agreements between individuals or entities. These contracts can have a significant impact on certain aspects of an individual’s business or personal life due to their governance of how sales or purchases are made, as well as how agreements are formed and enforced that cover the providence of goods, services and benefits as well as insurance.
Key Elements of a Legal Contract
Every contract must have several key elements in order to be considered legally binding. These elements include:
- All parties considered competent enough to enter into a contract
- Appropriate subject matter
- Consideration – whether the contract is mutually beneficial
- Mutuality of agreement between parties
- Mutuality of obligation between parties
Certain contract cases require clear and convincing evidence in order to prove certain elements of the contract. This includes:
- Oral contracts
- Modification of pre existing contracts
- Avoidance of pre existing contracts
- Waiving of any or all existing contractual terms
- Reformation of pre existing contracts
Offer and Acceptance In Contract Law
The foundation of any contract, verbal or written, is a valid offer and acceptance. A key part of this is that there must be sufficient information about the offer and its acceptance to allow a court to specifically determine what is being offered as well as what is being asked for in return. This means that the court must be convinced that there is a meeting of the minds by the showing of evidence that all participating parties have agreed to the same thing.
If these contractual terms are considered reasonably clear and unambiguous as to their meaning, then legally speaking a meeting of the minds exists regardless of whether or not one party understands the terms differently. That being said, if there is a proper misunderstanding due to any ambiguity in the contractual agreement, then legally speaking a meeting of the minds does not exist.
Without a formal written contract, the court has the option to enforce an obligation based on equitable principles, which can give one party an unfair benefit and/or the other party an unfair burden. This is one of the reasons why it is important to work with an experienced contract law attorney to create a solid legally binding contract.
Mutual Benefit in a Contract
Per contract law, a contract is only considered to be legally binding if it is mutually beneficial for all parties involved. This is also known as consideration. When one party does something without getting anything in return, the contract is typically considered unenforceable by the courts. This usually happens when one party decides to renegotiate an agreement strictly for their own benefit without any benefit for any other parties.
Contractual Rights and Obligations
The intention of contracting parties must be considered when determining their contractual rights and obligations. This means that in order to carry that intention into effect, a contract must be properly construed. With a contract containing clear and unambiguous words with definite meaning, courts have no reason to look for external evidence to determine the meaning of words.
If there is no ambiguity in the language of the contract, then there is no opportunity for construction by the court. In this situation, the language must be held to convey the specific intention of all parties to the contract, with no need for the court to search for meanings or conduct inferences in order to determine the actual intention of the parties.
Generally speaking, if a contract is subject to multiple reasonable interpretations or is simply inconsistent at face value, it will be regarded as ambiguous. If this occurs then a factual development is required in order to determine the real intention of the contracting parties.
In analyzing a contract to resolve any ambiguity, its language must be construed against its drafter. Known as the rule of contra proferentem, this is only applicable if the intention of the parties cannot be determined through the implementation of all conventional interpretation rules. This includes an evaluation of relevant external evidence.
Healthcare Employment Contracts
Some industries such as the healthcare field require more complex contracts to handle the more intricate nature of their business operations. Healthcare contracts have a range of unique legal requirements, primarily focusing around the employment of physicians and healthcare professionals. Employment contracts for healthcare workers are unusually intricate, requiring careful drafting and analysis by a contract lawyer who is not only familiar with employment contracts but also has knowledge of the legal side of the healthcare industry.
Because physicians and healthcare workers are some of the most highly trained and intelligent professionals in the workforce today with high demand skills, the legal aspects of their hiring and employment can be tricky. There are several key aspects of healthcare employment contracts that an attorney will address when reviewing or drafting these agreements:
- Non-compete clauses
- Reasonable access to medical and billing records for the purposes of legal defense against government investigations, audits by the payor or any other third party claims
- The creation of provisions addressing the apportionment of liability that may arise from overpayment recovery by a third party payor
- The design of provisions that adequately address medical malpractice insurance and tail coverage
Breach of Contract
When a contractual party fails to fulfill a material term of a contract, this is known as a breach of contract. Although there may be additional consequences for an intentional and willful breach of contract, generally speaking a contract does not involve intent. Instead it is considered to either be performed or not performed. There are three main types of breach of contract, which include:
- Material breach of contract
- Anticipatory breach of contract
- Substantial performance
If you are in need of help in understanding contractual law in Michigan, it is strongly advised that you work with a business law attorney specializing in legal contracts. Every state can vary in the specifics of how contracts are formulated and enforced, so it is important to pick a contract lawyer who specializes in the state in question. This will ensure that the best possible contract is created that protects the interests of all parties and prevents unnecessary litigation and court proceedings.