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📹 Watch: Understanding Florida Contract Law
Under the State of Florida Contract Law, Are Oral Agreements Valid?
Contracts are agreements between two or more parties. These agreements can be made by writing down the terms in a physical contract or making a verbal agreement.
In the state of Florida, enforceable contracts can be both verbal and written. Both are legally binding in most cases – but not always advisable.
📝 Oral Contracts
Oral contracts are legally binding for short-term contracts that will be fulfilled within a year. While courts will recognize a verbal contract, you may have a hard time proving the existence of terms and conditions since there’s no physical contract to back up any claims you make.
📄 Written Contracts
Written contracts are required in the case of real estate sales. Such contracts are also the preferred contract for long-term contracts – like business agreements created by business owners. A written contract is physical proof of the agreement and receives more support in the court system.
A complete list of what Florida law allows as verbal agreements and what contracts must be written will be covered later under statute of frauds.
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Cooling-Off Period in Florida: Is 3-Day Contract Cancellation Law Valid in This State?
A contract is a legally binding promise between two or more people. If one party were to break their promise, they would be breaching the contract and the other party could pursue legal action in retribution.
Thankfully, parties who enter a contract do have an easy out. Sometimes a person may enter a contract too quickly or without knowing all the facts. Both parties have a “cooling off” period after agreeing to a contract where they are allowed to give notice of cancellation.
⏰ The 3-Day Rule
The 3-day contract law Florida follows allows for 72 hours to cancel a contract under most circumstances.
There are certain exceptions to this rule – such as the sale of a vehicle. Under commercial contract law, the sale of goods and services is the most common type of contract to allow for a cooling-off period.
💡 Pro Tip: Contact our lawyers who specialize in contract cases to find out if your contract has a cooling-off period.
How and When Does the Florida Right of Rescission Law Kick In?
Home Loans
Protected under rescission rights
Lines of Credit
3-day cancellation period
Refinancing
Subject to rescission law
The right of rescission applies to loans and mortgages. It is the right of a person to cancel a loan without being penalized financially. This right was created by the Truth in Lending Act. It applies to home loans, lines of credit, and refinancing.
In Florida, each person has a 3-day right of rescission. During this 3-day period after entering a contract for a loan, a person may cancel the contract without a financial penalty. A person who uses their right of rescission is allowed to do so without having to provide an explanation or defend their reason for canceling the loan.
Important Exceptions:
- Condominium purchases in Florida: 15-day rescission period
- Cash-out refinanced loans: No rescission period
Is the 3-day rescission law applicable to your loan? Each loan provider is required to let borrowers know of the rescission period. This law protects borrowers from being taken advantage of by loan companies.
Florida Contract Law Statutes: The Basics
A statute is a written law created by the legislative branch of the government. The term act is also used interchangeably with statutes.
While all statutes are laws, not all laws qualify as statutes. Some laws are regulations that are followed but have not gone through the legislative process of becoming a written statute.
Contract law covers all laws that affect people who enter into a legal agreement with each other.
In addition to 3-day cancellation laws and rescission laws, here are four of the most common Florida contract law statutes.
1. Laws for a Legally Binding Contract
A legally binding contract must contain three elements of a contract for courts to recognize it as a contract. While these rules are not considered statutes, they form the basis of all other contract law statutes because they define what a contract is.
📋 An Offer
Contracts begin by stating what is being exchanged and what will be received. This is called consideration and is the foundation of every contract. Each party needs to have a fair consideration for a contract to be legal.
✅ An Acceptance
After the offer is made, all other parties must accept the contract and the terms within before the contract becomes active and legally binding. This acceptance can’t be done out of force or coercion or else the contract will be void.
📝 Terms and Conditions
The contract needs to outline details for the exchange of goods or services. These include a time, date, and place of exchanging goods or services for the contract to be fulfilled.
2. Statute of Limitations
Written Contract Claims
Oral Contract Claims
The Florida statute of limitations is a law that gives a specific timeframe for filing a legal claim. The statute of limitations was created to help speed up the legal process. If people were to wait for much longer than the statute of limitations to file claims, evidence would begin to disappear and court cases would be prolonged.
3. Statute of Frauds
The statute of fraud lists the types of contracts that require written documents to be legal. If the contracts are not written, they are considered fraudulent and have no legal backing.
Contracts requiring written documentation:
- 🏠 Any contracts related to the buying and selling of land or real estate
- 📅 Contracts that last over a year
- 💰 Sales contracts for amounts over $500
- 🏥 Health care contracts concerning medical procedures
- 🔑 One year or longer leases
- 💳 Contracts involving debt payment
⚠️ Important Exceptions:
Partial Performance: If a person partially fulfilled a written contract through an oral contract, the oral contract is legally binding.
Promissory Estoppel: Protects a person who relies on a reasonable promise and subsequently suffers a loss when the promise isn’t fulfilled.
The rules and exceptions for the statute of frauds are far more complex than one list can cover. Every person’s case is unique and needs to be evaluated by an attorney before a contract is drafted.
4. Breach of Contract Laws
A breach of contract occurs when someone doesn’t follow through with a contract.
In Florida’s breach of contract law, a person needs to be able to prove three things:
There was a legally binding contract.
A party broke some or all the terms of the contract.
A party suffered a loss or personal injury because of this breach.
Once those three terms are met, a person can move forward in their claim of a breach, using support from the other contract laws and statutes in their contract disputes.
Need Help Navigating State of Florida Contracts or the Laws Surrounding Them?
Contract laws are very complex because there are so many exceptions to the rules and clauses that change business laws.
As an individual or small business, you can easily miss important business litigation when writing your own contract. That’s why hiring a law firm for contract cases with a positive attorney-client relationship is important.
If you live in Orlando, Florida, contact the Cueto Law Group for legal advice on contract creation so you can understand the latest Florida contract laws and rules for creating a valid contract.
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Is Florida Car Buyer’s Remorse Law a Real Thing?
No, car buyer’s remorse law is one exception to the cooling-off rule. When purchasing a vehicle in Florida from a seller, there is no time period where a buyer can legally return a purchased car without a financial penalty. You fully own the car once you purchase it, whether it’s new or used, and must go through regular routes to sell the car back if you no longer want the vehicle.
What Purchases Qualify Under Buyer’s Remorse?
In Florida, buyer’s remorse law only applies to purchases made through a home solicitation sale. The purchase can be canceled within three business days from the date of purchase with no monetary penalty. All other purchases do not qualify for buyer’s remorse. Consult your lawyer if you are not sure if your purchase qualifies.
What are My Options for Contract Cancellation Outside of the 3-Day Period?
Many contracts will have a termination clause that sets rules for how to cancel the contract legally – such as through liquidated damages or specific performance. Otherwise, you can void a contract under a breach of contract law if you can identify a legitimate reason for submitting your written notice – such as changed circumstances or misrepresentation.
