Contracts

Contracts are commonplace in our daily lives. Contracts can be flexible, complex, or as simple as exchanging two promises. The promise can be straightforward, such as mowing the lawn or selling a lawnmower. For there to be a contract, there must be a consideration. Consideration is a formal way of saying “something with value or perceived value.” The consideration can be the promise to perform a service or provide a good. Some contracts are an exchange of promises.

In Virginia, as in most states, contracts can also come in many different forms. For example, you can have a valid and enforceable oral contract or written contract. To give contracts even more flexibility, Virginia contracts can be expressed, such as a detailed written agreement, or implied, where the parties’ customary practices, relationship, and actions are evidence of an implied contract between them.

It is crucial to keep in mind that although contracts can come in various shapes and sizes, the form of the agreement can impact the rights of the parties. For example, because of a doctrine known as the statute of fraud and some other Virginia statutes, many Virginia contracts must be in writing to be valid and enforceable. As a result, it is always essential to work with a skilled and experienced contract lawyer who can help navigate you or your business through the complexities of contract law.

Virginia Contract Law

Many legal disputes arise out of and are resolved with contracts. A contract in its most primitive form is simply a legally enforceable agreement. In the area of law, for a contract to be legally enforceable, several requirements must be met, including an offer; acceptance of that offer; mutual understanding of the agreement; capacity to agree; an item or service; consideration in exchange for the item or service; and legality of the contract itself, including its terms, provisions, and type of consideration, item, and service being exchanged.

Learn More About Contract Drafting

Negotiating Contract Terms, Provisions, and Agreements

A skilled negotiator can make a tremendous difference in the results and outcome of a business deal. Negotiation is an art. It involves complex understandings of the interests of multiple parties, the law, the applicable industry, and the surrounding circumstances. With litigation and transactional law skillsets, our attorneys bring a total package to a negotiation. Even in cases where the parties wish to “work the deal out themselves without an attorney,” we often spend time preparing our clients through mock negotiations and exercises to maximize their effectiveness and produce positive results.

Negotiation: Preparation, Preparation, and More Preparation

Negotiation, like litigation, favors the most prepared party. The most thorough and prepared negotiator is often the more robust negotiator. Skillful articulation, witty retorts, and charisma will tip the scales in your favor. However, preparation will win the day. It is essential to understand the other party and what they want and know what they will bend on and break them. Focus more on the interests at hand instead of each party’s position. Be prepared with various alternative theories and contingency plans. If you have a solution to their concerns, then those concerns will not become problems for you.

Tortious Interference with a Contract

In Virginia, tortious interference with a contract generally occurs when one party knows of the existence of a valid contractual relationship or business expectancy between two or more other parties but intentionally interferes or disrupts the contract. If the interference is harmful enough, it can cause a breach of contract or termination of the contractual relationship, damaging one or both parties. Besides, specific facts and factors, such as “at-will” employment, can impact the elements involved in proving this cause of action.

We strongly recommend that you consult with a business lawyer or contract lawyer knowledgeable in litigating this cause of action. The Virginia case law is significant and continuing to develop as Virginia courts explore new fact patterns in the digital age.

Breach of Contract

Breach of contract is one of the most common claims and causes of action for a lawsuit, which is not surprising given the complexity of business arrangements. So many contracts are drafted poorly or without the parties fully understanding their consequences. In Virginia, to prove liability for a breach of contract, lawsuit the plaintiff must show that the other party, without legal excuse, failed to perform an obligation placed on it by the contract or Virginia Code § 59.1-507.1. “Breach of contract: material breach,” in the absence of a written agreement. Also, under Virginia contract law, there is an implied standard of good faith and fair dealing that is read into every contract. This is not a separate cause of action but could be used to show or determine a breach of contract independently. Our Virginia contract attorneys have extensive experience litigating breach of contract cases involving loan agreements, patient contracts with doctors’ offices, copyright licensing, non-disclosure agreements, and employment contracts.

Virginia Blue Pencil Rule

It is imperative to consult an experienced contract attorney when drafting, reviewing, or negotiating a contract, as not all agreements are legally enforceable. This is especially important in Virginia as case law has shown that Virginia Courts refuse to “blue pencil” contracts. The “Blue Pencil Rule” permits a court to modify an otherwise unenforceable provision in an agreement, usually a restrictive covenant, to make it reasonable.

Many contracts contain a severing provision in their miscellaneous or general terms section. Blue-penciling is different from a severing provision in an agreement. Severing allows the complete removal of an unenforceable provision from a contract that is otherwise legally enforceable. At the same time, blue-penciling enables the court to rewrite invalid language in an agreement to make it enforceable. However, as Virginia does not permit blue-penciling, drafters cannot rely on the courts to correct errors or oversights made while drafting an agreement to make their unenforceable language enforceable.

Practice Group

Robert Powers

Dirk McClanahan

Zach Miller

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