Contract Law todayThe function of contract law is to ensure that when people make an agreement, that agreement is kept.
A contract is a promise which can be taken to the courts for enforcement if breached. Failure to perform something required by the contract on the side of either party constitutes a breach of contract.
Basic Elements of a Contract:
- Agreement — An offer must be made, and accepted.
- Consideration — The terms of the contract must be legally sufficient/bargained for.
- Legal Capacity — Parties must be of sound mind and legal age. In Texas, legal age is mostly 18.
- Legal Purpose — Contracts to do illegal things are invalid
Unilateral promises are promises for an act. Bilateral promises are promises for promises.
Formal contracts are contracts with formalized documentation. Informal contracts are everything else.
Executed contracts are contracts in which both parties have fully performed their duties under the contract. Executory contracts are contracts in which one or more parties have not fully performed their contracted duties.
Valid contracts are legally enforceable and meet the elements above. Void contracts are not enforceable, and place no legal obligations on the parties. Voidable contracts are contracts which one or more parties can dissolve without penalty.
Every contract deals with two parties. First party is the offeror or promisor, the person who makes the offer or promise to do something. The second party is the offeree or promisee.
The Plain Meaning Rule states that when a contract’s meaning is clear and unequivocal, a court will enforce it according to its obvious terms. If the terms are not clear and unequivocal, the court will interpret it. Simple terms will be given priority in interpretation over complex terms. Written terms take precedence over preprinted terms.