Contract

A contract is any legally-enforceable promise or set of promises made between parties. In the civil law, contracts are considered to be part of the general law of obligations. This article describes the law relating to contracts in common law jurisdictions.

Scope of common law contract law

Basic common law contract law addresses four sets of issues:

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• When and how is a contract formed?
• When may a party escape obligations of a contract (such as a contract formed under duress or because of a misrepresentation)?
• What is the meaning and effect to be given to the terms of a contract?
• What is the remedy to be given for breach of a contract?

Contract formation: There must be an agreement which consists of an offer and acceptance, consideration (see also consideration under English law) and contractual intention for a simple contract to exist: i.e. it is not a deed - otherwise no consideration is needed.

Related Topics:
Offer and acceptance - Consideration - Consideration under English law

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Subject to the sine quo non of Contract Formation, other ingredients that make up a contract include:

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:* Form - In some cases, certain formalities (that is, writing) must be observed.

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:* Capacity - The parties must be legally capable of entering into a contract.

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:*Consent - The agreement must have been entered into freely. Consent may be vitiated by duress or undue influence.

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:* Legality - The purpose of the agreement must not be illegal or contrary to public policy.

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A contract which possesses all of the above ingredients is said to be valid. The absence of an essential element will render the contract either void, voidable or unenforceable

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In some situations, a collateral contract may exist.

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Meaning and effect of contract terms: Many contract disputes involve a disagreement between the parties about what terms in the contract require each party to do or refrain from doing. Hence, many rules of contract law pertain to interpretation of terms of a contract that are vague or ambiguous. The parol evidence rule limits what things can be taken into account when trying to interpret a contract.

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Privity: In general, only parties to a contract may sue for the breach of a contract.

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