Brundage Law P.A.

Business Lawyers For Business People

Can you make a one-sided contract?

On Behalf of | Apr 6, 2023 | Business Litigation |

As a budding entrepreneur, you might look to successful millionaires for inspiration. When they say that business is a dog-eat-dog world, you might believe that’s how it has to be if you wish to get ahead. 

Yet the law does not entirely agree with you, at least regarding contracts. Here is why:

Contracts need to be mutually beneficial

Lawmakers know that some people are more naive than others and that some people will try to take advantage of that. Therefore, the law gives anyone signing a contract a certain amount of protection from abuses.

If a court finds that the contract favors one party too much and that upholding it would be unconscionable, they might declare it or the relevant section void. Here are a few examples:

  • You get a small supplier to agree to a price far below market rate without guaranteeing to buy a sufficient quantity to make it worthwhile for them.
  • You agree to bring an inventor’s products to market in return for them signing all rights over to you without giving them adequate compensation in return.
  • You have an employee sign a non-compete agreement that makes it incredibly difficult for them to get another job in the industry.

You can probably think of real-life situations where one party has done something like that and gotten away with it. That’s the thing – these situations are not always clear-cut.

Regardless, making contracts that will seem fair both now and in hindsight reduces the chances you’ll face a legal challenge later. It also makes for better business relations and reputations.