simply stated, is an enforceable agreement between two or more parties which
creates obligations between those parties. Parties entering into a contract are
bound by its terms, so whether the subject matter is of a consumer or business
nature, each party should be acutely aware of the promises being made.
Does a contract have to be written?
What is required to form a contract?
Can a contract be changed?
What happens when the contract is
What can be done when the terms of a
contract are not met?
Certain types of
contracts, such as those affecting real estate, negotiable instruments, and
those requiring long-term performance are often required to be in writing in
order to be enforceable. Although oral agreements can be valid contracts, the
specific terms are often difficult to prove in a court of law.
no formal or technical words are required to form a contract. However, contracts
must have the following characteristics:
to the contract must be competent to enter into the agreement. They must have
the capacity to understand the terms of the agreement and not be under any
The terms of the contract must be
clear and definite;
Contracts must impose an
obligation on each of the parties;
The contract must have
"consideration," which means that each party must acquire and/or surrender
something of value. Consideration can be expressed in various forms. For
example, a promise to repair an automobile, exchanged for a promise by the
other party to pay for the repairs;
be a "meeting of the minds" by the parties at the time of the agreement; and
Every agreement must have an offer by one
party and an acceptance by the other party.
to a contract can always agree to modify the agreement. The modified agreement
then becomes a new contract provided all the requirements of a contract as
discussed above have been met. Similarly, the parties can agree to rescind or
terminate a contract.
party has, without justification, failed to live up to his or her obligations
under the terms of the contract, it is known as a "breach of contract." When one
party breaches the contract, the other party may be excused from performing
under the contract.
non-breaching party may file a suit in court seeking damages from the breaching
breach is substantial and goes to the heart of the agreement, the non-breaching
party is entitled to all sums which result directly from the breach.
some cases, the non-breaching party can also request the court to require the
breaching party to perform the contractual obligations. This type of action,
known as "specific performance," is often found in those circumstances where the
performance to be rendered is unique and is difficult to quantify in monetary