Contracts: Legal Perspectives

Abstract

A contract is a legally binding and enforceable agreement. Other agreements may have moral, economic or political value, but not in law. Any person, including an artificial person like a corporation, can enter into a contract. Some persons may lack the legal capacity to contract, such as minors and mentally incapacitated persons. An agreement may also not be a contract if a court determines that one party did not enter into it freely and voluntarily. A court may declare a contract void, asserting that a material term is uncertain. It may render it voidable on grounds of a material mistake. It may treat it as unenforceable for being illegal, contrary to public policy or good morals. A contract usually is formed when one party makes an offer which is accepted by the other. The common law ordinarily requires a ‘bargained-for-exchange,’ or consideration, between the parties. The civil law requires a cause or reason for contracting. Contracts usually must be performed according to the terms of the contract. A failure to perform may give rise to a breach of contract. The most common remedy for breach is specific performance in civil law and damages in common law. There are many different kinds of contracts. Contracts are concluded in family, business, and political life. A person who buys a cinema ticket concludes a contract with the cinema. A multinational corporation that agrees to build an oil refinery for a government concludes a contract as well. Contract law in the twenty-first century faces many challenges. Contracts, for example, can now be concluded en masse and globally over the Internet. This raises concerns about how to regulate contracts. It also invites philosophical debate about preserving the freedom of parties to contract. This debate is likely to encourage dialogue about harmonizing contract law in the interests of stable and equitable contract practices across national boundaries.