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Protecting contracts from changes in precedent

Business law has many complexities that may present challenges for you and your company as you draft contracts. Failing to adhere to the terms of an agreement has the potential to spark serious litigation that may damage your business. At Welbaum Guernsey, we often answer contractual questions about federal and state laws, as well as legal precedent.

The Houston Chronicle notes that you are required to fulfill the responsibilities you have agreed to in your business contract, as well as complying with applicable laws. If you have made promises that exceed minimum legal requirements, you are held to these instead of those outlined by the law. However, in a lawsuit claiming that you are guilty of breach of contract, a judge will also refer to legal precedent in determining whether the contract is enforceable.

Precedent is the way that the law is interpreted in court. So, in addition to understanding what the law says, it is important to look at past and current disputes to see how they may apply to your case. Using these decisions when drafting contracts may help you avoid a provision that is illegal.

Once the contract is signed, precedent may still change the legality of one or more portions. But, even if one of the clauses in your business or employment contract is ruled unenforceable in a dispute, it may not cancel the rest of the agreements and responsibilities in the document. You may include a clause to this effect to ensure that you do not lose a dispute due to changing precedents. More information about contract law is available on our web page.

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