Contract Law in Oklahoma

Oklahoma law says: “A contract is an agreement to do or not to do a certain thing.” The definition sounds simple enough, but there is a large body of law developed to handle the single biggest problem that occurs with contracts: When one party doesn’t see it the same way as the other party does. Title 15 of the Oklahoma Code is entitled “Contracts,” and specifies in detail how contracts are formed, how they are to be interpreted by the court, and lays out the specifics of specialized contracts.

Contract Basics

A contract between any two or more people or companies requires (1) an Offer be made; (2) Acceptance of the Offer; (3) Consideration given by the parties to each other; and (4) Performance of the parties. These four basic elements are the building blocks of understanding how to build and administer contracts, how to enforce contracts, and how to get out of contracts. Contract law is, by default, State law. Unless there are circumstances or specific matters in a contract that would require otherwise, contract law is state law, not federal law, and depending on what state’s law applies, a contract can be interpreted differently.

Even though there is a large body of law regarding contracts, Oklahoma’s legal system does not generally try to get in the middle of two or more private parties and their agreements (and disagreements); however, the court system will get involved to settle contract disputes, force performance where appropriate, and generally resolve a contract claim by putting the parties back into the position they contracted for. Contract law differs from tort law in that there are no punitive damages available to a claimant in a contract dispute.

If, however, one party has committed a tort, multiple claims can be charged against the other, including not only breach of contract, but also torts such as fraud, misrepresentation, and deceit. If you believe you have been wronged by another party’s breach of contract, a legal review to consider possible tort claims may be strategically critical to handling the situation. Dangerously, the loser of a legal contract dispute may under certain circumstances be charged with the winner’s attorney fees and costs.

How To Get Out Of A Contract

Things change, and often, the facts and circumstances of a situation change so much that one or more parties want to get out of a contract. When one party fails to perform, the other party can file a lawsuit for breach of contract. If you are bringing the lawsuit (i.e., you are the Plaintiff), then you should get legal counsel to consider potential tort claims as well. If you are being sued (i.e., you are the Defendant), then you should get legal counsel to explore every option for defense, including, for example, having the contract declared void, voidable, violative of the law or constitution, or unconscionable.

A clever defense often involves framing and focusing the legal issue not on a party’s failure to perform, but on the contact itself and activities such as Consent, Duress, Fraud, Mistake, Acceptance, Revocation, and/or Ratification.

Business Contracts

Businesses regularly enter into contracts, and therefore Oklahoma contract law becomes an important body of knowledge with which to be familiar. Statutory contract law is found in Title 15 of the Oklahoma Code. Most business disputes and claims of liability involve contracts, and although a contract may seem simple and straightforward, it is generally wise to have an experienced business attorney review contracts before committing your business.

Unlawful Non-Contract Business Activities

Besides contract law, there are also other ways in which companies can infringe on individuals and other companies. These include, for example, business torts, actions that harm shareholders, and consumer protection violations.

Business Torts

There are a number of torts which are peculiar to business, sometimes generally referred to as “unfair competition,” designed to protect the business relationships and economic interests, and which include:

• False Statements;
• Third Party Interference;
• Intentional Interference with Prospective Economic Advantage;
• Unfair Trade;
• Bad Faith;
• Racketeering (RICO);
• Intellectual Property Infringements; and,
• Product Liability.

Actions That Harm Shareholders

There are legal duties imposed upon corporate officers and directors toward the company and its shareholders (or members, in the case of an LLC). The courts have imposed liability based on the failure of a director or officer (or manager, in the case of an LLC) to act with due diligence or loyalty in managing the affairs of the corporation and acting in its best interest. Often these situations can arise when the circumstances of a business transaction place an officer or director (or manager, in the case of an LLC) on both sides of a transaction. For example, if Joe is a Director of ABC Corp., and ABC Corp. purchases products from another company that Joe owns, then Joe is on both sides of the transaction and is in a position to do what’s best for Joe instead of what’s best for ABC Corp.

Consumer Protection

Oklahoma has a specific body of law called the Oklahoma Consumer Protection Act (“OCPA”), found at 15 O.S. § 751 et seq. The OCPA defines actions which are violative of the law (called “Unlawful Practices,” see 15 O.S. § 753), and which include specific acts of misrepresentation, tie-in sales, and bait-and-switch transactions.

Employment Contracts

If a business is an employer, an enormous body of law comes into play in order to stay in compliance and out of legal trouble. There are many laws, federal and state, which govern and regulate a business that pays people for work. This is a specialized and complex body of law, and as such, an attorney experienced in such matters should be consulted for advice. Furthermore, when a business finds itself in a dispute with an employee, it is generally wise to have an experienced attorney review the matter before taking action; otherwise, a disgruntled employee may have multiple avenues of recourse which are not only readily available, but easy for the employee to engage (e.g., EEOC, Dept. of Labor, Okla. Human Rights Commission, OESC).

Specialized Contracts

The law recognizes a large number of relationships that have special responsibilities. If you are entering into a contract within one of these areas, your agreement must be compliant. Examples of areas where Oklahoma and Federal law get directly involved include construction, banking, trucking, employment, manufacturing, distribution, wholesaling, loans, guaranty/surety, bailment, innkeepers, secondhand watches, inventions, healthcare, insurance, home repair, health spas, telemarketers, gift certificates, and restraint of trade.

Consumer Protection Act

The Oklahoma Consumer Protection Act (“OCPA”; 15 O.S. §751 et seq.) provides for general protection of consumers entering into agreements with businesses. Often a business’ violation of the OCPA can be helpful to an individual in working through a contract dispute with the business. If you are a consumer with a potential dispute with a business, consulting with an attorney familiar with the OCPA is an important step towards resolving the dispute favorably, because it is a rare event for a business to voluntarily tell a customer that it has somehow violated the OCPA in its dealings.

Lawyers Experienced In Business, Contracts, & Complexities

Allison Legal is experienced in the law of contract, with particular emphasis and experience in aggressively representing individuals, executives, and small and medium sized businesses, including start up, entrepreneurial ventures such as equity and capital formation, mergers, acquisitions, and issues faced in growing businesses. Additionally, when a business finds itself in a dispute or potential legal issue, Allison Legal is highly knowledgeable and capable in intelligently and aggressively advocating for your rights.