Contract Terms Validity: Is It Enforceable?

Have you ever heard someone say that a particular term in a contract is so outrageous, unfair, one sided, or ridiculous that it cannot possibly be enforceable? If you are signing a contract as a consumer, that may very well be true as there are several laws out there for the express purpose of protecting the consumer.  However, if you are signing the contract as a business, for the most part the courts presume that you are a “big boy,” know what you’re signing (even if you don’t or in fact never even read the contract) and will hold you to these contractual terms. This is true if you are signing a contract with or as a supplier, with a general contractor or a commercial business owner for contract terms validity.

However, there are some notable exceptions to this rule. One is indemnification provisions that attempt to shift liability from the bad actor to another party. Another is a provision that seeks to impose a financial penalty for failure to perform on time. Such a penalty, without a rational basis for the amount, can be deemed void, but only under specific circumstances.

So, read those pesky contracts before you sign them! If you have concerns, consult your attorney for help interpreting your rights and obligations under the contract. And don’t be afraid to negotiate more favorable contractual terms when that option is available.

Karen Ensley
Ensley Benitez Law, PC
469-983-6500
karen@eblawtexas.com

© Karen Ensley and Brian Benitez, Ensley Benitez Law, PC, 2021. All rights reserved. This article is provided for educational reasons exclusively and is not meant to be construed as legal advice. Ensley Benitez Law, PC, will represent you only after being retained and that agreement is made in writing.