What is contract

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Contract Definition An agreement between private parties creating mutual obligations enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are: In some states, element of consideration can be satisfied by a valid substitute. Overview Contracts are promises that the law will enforce.

Contract law is generally governed by the state Common Law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the Contract may vary between the states.

If a promise is breached, the law provides remedies to the harmed party, often in form of monetary damages, or in limited circumstances, in the form of specific performance of the promise made.

Elements -- Consideration and mutal assent Contracts arise when a duty comes into existence, because of a promise made by one of the parties.

To be legally binding as a contract, a promise must be exchanged for adequate consideration. There are two different theories or definitions of consideration: Bargain Theory of Consideration and Benefit-Detriment theory of consideration.

For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of generosity is normally not considered sufficient detriment to constitute adequate consideration. Here, the essential condition is that the promisor was given something specifically to induce the promise being made.

Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law, such as the Statute of Fraud, may require some kinds of contracts be put in writing and executed with particular formalities, for the contract to be enforceable.

Otherwise, the parties may enter into a binding agreement without signing a formal written document. For example, Virginia Supreme Court has held in Lucy v.

Zehmer that even an agreement made on a piece of napkin can be considered a valid contract, if the parties were both sane, and showed mutual assent and consideration. The Uniform Commercial Code, whose original articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts.

That is, the plaintiff non-breaching party in a contractual dispute suing the breaching party may only win Expectation Damages when they are able to show that the alleged contractual agreement actually existed and was a valid and enforceable contract.

In such case, expectation damages will be rewarded, which attempts to make the non-breaching party whole, by awarding the amount of money that the party would have made had there not been a breach in the agreement plus any reasonably foreseeable consequential damages suffered as a result of the breach.

However, it is important to note that there is no punitive damages for contractual remedies, and the non-breaching party may not be awarded more than the expectancy monetary value of the contract, had it been fully performed.

However, in certain circumstances, certain promises that are not considered contracts may be enforced to a limited extent.

In another circumstance, the court may award Unjust Enrichment to a party, if the party who confers a benefit on another party, if it would be unjust for the party receiving the benefit to keep it without paying for it.

Finally, one modern concern that has risen in the contract law is the increasing use of a special type of contract known as " Contracts of Adhesion " or form-contracts.

This type of contract may be beneficial for some parties, because of the convenience and the ability by the strong party in a case to force the terms of the contract to a weaker party. Examples include mortgage agreements, lease agreements, online purchase or sign-up agreements, etc.

In some cases, courts look at these adhesion contracts with a special scrutiny due to the possibility of unequal bargaining power, unfairness, and unconscionability. Last Updated MayJonathan J. Kim menu of sources.to incur, as a liability or obligation: to contract a debt.

to settle or establish by agreement: to contract an alliance.

to assign (a job, work, project, etc.) by contract: The publisher contracted the artwork. to enter into an agreement with: to contract a free-lancer to do the work.

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to enter into (friendship, acquaintance, etc.). to betroth. Contract law is generally governed by the state Common Law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the Contract may vary between the states.

Related to contract: contract law, employment contract, breach of contract, Elements of a Contract contract 1) n. an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.

a contract that does not require consideration in order to be binding but that must be sealed, delivered, and show a clear intention of the parties to create a contract under seal Note: Contracts under seal were in use long prior to the development of . a contract made binding by the observance of required formalities regardless of the giving of consideration specifically: a contract that is a contract under seal, a recognizance, a letter of credit, or a negotiable instrument.

This contract provides for the study, design, development, implementation, test, integration, document and delivery of the software and hardware specification for NorthPole, the next generation neural inference machine.