Commercial industries, construction firms, and other forms of corporations or business entities are regulated and largely organized by contracts of various types. Since a contract needs to be thorough and should be drafted to be legally sound, most are intricate, often to the point where the content of the contract becomes difficult to interpret. Business veterans and new entrepreneurs alike can be stumped by a contract or, even worse, inadvertently violate a contract’s requirements and end up in a legally compromising situation.

Contract Formation FAQ

Does a legally binding contract exist if it is never signed yet work is carried out according to its clauses?

If a contractor or subcontractor starts a project based on the requirements or demands of an unsigned contract, it is possible that a court will see that contract as official, even with the lack of signatures. Even when the contract clearly defines that signatures are necessary to make it binding, if the work is started or completed, there is a high chance the contract was “signed” by virtue of work performance alone.

How long can someone file a lawsuit for a contract violation in Georgia?

Georgia has a fairly lenient statute of limitations when it comes to contract violation lawsuits. For written contracts, the limit is a full 6 years after the contract was violated, or after violations were reasonably noticeable. This statute will most likely also apply to unsigned commercial contracts that were carried out. Oral contracts have a 4-year statute of limitations for litigation and lawsuits.

What constitutes an oral contract in commercial and construction litigation?

If two parties have a discussion regarding work and compensation for that work, it might be seen as an oral contract, especially if that work is consequently started. Evidence of such discussions will further validate the presence of an oral contract having formed. Whenever you talk about work with contractors or subcontractors, you may want to record the audio – after notifying all parties present about the recording in progress – in case you have to argue for the existence of an oral contract later.

If a party begins work that was never fully agreed upon in a written or oral contract, does a contract exist anyway?

It would be unusual for a court to find that a contract exists in a circumstance where it should have been clear to a reasonable party that the design, purpose, or scale of the work was never finalized and therefore should not have begun. Many cases such as this are open to interpretation and a ruling judge’s or administrator’s discretion. Working with a construction or commercial litigation attorneys is always recommended to protect your best interests and finances.