Arkansas Contract Laws

• Contracts are legally binding documents.contract 20309 image by pablo from Fotolia.com
  
  Contracts are used in a variety of situations ranging from business to real estate to personal needs. A contract is an agreement among two or more parties in which some action is completed. Common contracts for Arkansas consumers include purchasing a home, making home repairs or buying a car. Other contracts include company contracts, employment contracts, a contract with a lawyer or any other agreement between parties.
  
  

Breach of Contract

• A contract is mutually binding between two parties. If either party breaches, or breaks, the contract, the state of Arkansas allows the other party to sue for damages. Once breached, the contract is considered void because it was already broken and the party that did not receive what was expected from the contract will not have any requirement to keep its end of the contract.
  
  

Illegal Contracts

• There are situations in Arkansas where a contract is considered illegal. Anyone that enters into an illegal contract in Arkansas will have penalties for the illegal contract. The exact penalties will differ based on the specific contract and the illegal actions. For example, a construction company that does not perform the appropriate disclosures for a contract before signing the contract might face fines and criminal penalties as a result.
  
  

Verbal Contracts

• Though verbal contracts are still considered a contract, unless there are witnesses to the contract, a breach in the contract is not enforceable. The state of Arkansas does not enforce verbal contracts unless there is proof of a contract, such as a witness.
  
  

Conditional Contracts

• As in other states, Arkansas allows conditional contracts. A conditional contract is a contract that will take place dependent on a specific action. For example, someone purchasing a home in Arkansas might put a condition on buying the home based on the outcome of a home inspection. If the home inspection shows a major problem, they can back out of the contract without penalties. These conditional contracts allow an individual a way out of the contract if there is a problem.