Basic Contracts Law: An Overview
Contracts are a fundamental part of our society. They are central to business transactions, employment agreements, and even simple agreements between friends. A contract is a legally binding agreement between two or more parties. Contracts can be oral or written but are typically in writing to provide proof of the agreement.
In the United States, contract law is mainly governed by state common law. Common law is the body of legal rules and principles established by court decisions, rather than by legislative statutes. However, there are also federal laws that apply to specific types of contracts, such as those related to employment and consumer protection.
To form a contract, there must be an offer, acceptance, and consideration. An offer is a proposal to enter into an agreement. Acceptance is the agreement to the offer. Consideration is something of value that is exchanged for something else of value. For example, in a contract to purchase a car, the offer would be the price of the car, the acceptance would be the agreement to pay that price, and the consideration would be the car itself.
Contracts can be bilateral or unilateral. A bilateral contract is an agreement in which both parties exchange promises. For example, if you agree to mow your neighbor`s lawn for $50, and your neighbor agrees to pay you $50 for mowing the lawn, this is a bilateral contract. A unilateral contract is an agreement in which only one party makes a promise. For example, if you offer a reward for the return of a lost item, anyone who finds the item and returns it is entitled to the reward.
Contracts can also be express or implied. An express contract is an agreement in which the terms are explicitly stated, either orally or in writing. For example, a contract to purchase a car would be an express contract. An implied contract is an agreement in which the terms are inferred from the parties` conduct and circumstances. For example, if you go to a restaurant and order a meal, an implied contract is formed that you will pay for the meal.
In addition to offer, acceptance, and consideration, contracts must also meet other requirements to be enforceable. For example, the parties must have the capacity to enter into the agreement. This means that they must be of legal age, mentally competent, and not under duress or coercion. Contracts must also be legal and not be contrary to public policy. For example, a contract to commit a crime would not be enforceable.
In conclusion, understanding basic contracts law is important for anyone who enters into agreements, whether in a personal or professional capacity. By knowing the requirements for forming a contract, the different types of contracts, and the other legal requirements, you can ensure that your agreements are enforceable and protect your legal rights.