Contract Law

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Contracts are legally binding agreements between two parties that they will exchange things of value with each other.

• when two parties enter into a contract
  • they become legally liable to uphold their obligations
• enforceable in court as long as it does not violate the law
• contracts should spell out specific liabilities for violations and breaches

Conditions for a Valid Contract

• Each party must have the capacity to agree to the contract
• Must be an offer made by one party
  • can be verbal or in writing
  • written terms take precedence over verbal terms
  • many transactions must be conducted in writing
• Other party must accept the offer
• Consideration must be given
  • means both parties must exchange something of value
• Must be mutual intent
  • both parties enter the contract with the intention they are agreeing to the terms

Violation of Contracts

• violations of contract generally do not involve law enforcement agencies
  • treated as private disputes and handled in civil court
• these cases are known as breaches of contract
  • courts can take various actions:
    • enforce the terms of the contract
    • cancel a contract
    • award damages to compensate for harm