Avoiding Accidental Contracting

Summary

There is a staggering amount of litigation involving disputes over whether a binding contract was formed during contract negotiations. In a typical case of this kind, the parties agree on many issues while negotiating a deal, but they intend to execute a formal document and never get around to doing it before their relationship unravels for one reason or another. Litigation erupts. One party claims there is a binding contract and that the failure to execute that final document doesn’t matter. The other party claims he or she didn’t intend to reach a final agreement. In the contract law milieu, there are few scenarios more common—or more damaging to the careers of the parties accused of entering into accidental contracts.