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Contracts can sometimes be quite complex and confusing to understand. Here’s a list of some of the most frequently asked contract questions:
What Are the Elements of a Valid Contract?
In order for a contract to be valid, certain elements of proof must be met. These include: the existence of an agreement between the two parties; the parties are competent to form a contract; the parties agree to the arrangement; the agreement is supported by consideration; the agreement is not lawful; and the agreement follows the form required by contract laws. If any of these elements is missing, the contract might not be enforceable in a court of law.
What Is the Age at Which a Person Can Form a Contract?
Usually, a person needs to be of legal age in order to enter into a contract. In most states this is at least 18 years of age. This is referred to as the legal capacity to enter into a contract.
In addition to having legal capacity, a person also needs to have “competency” to form a contract. This is defined as: the ability to understand that a contract is being formed, and the ability to understand the general nature of the contract. So, even if a person has the legal capacity (age) to enter into a contract, a court might not enforce it if the person lacked the legal or mental capacity to do so.
What Does “Consideration” Mean in Relation to a Contract?
In a contracts claim, the term “consideration” refers to something of value that is given in exchange for the performance of the contract duties. Consideration is also called the “bargained-for-exchange”, usually the price paid for the promise. This indicates that the party receiving the goods or services has given something in exchange for those benefits.
Every contract agreement must be supported by consideration. In other words, you can’t make a contract for one person to give something to the other without receiving something in return. The consideration doesn’t have to be of the same exact value as the goods or services being provided. The focus is more on the legal obligation that the consideration “triggers” for the receiving party.
What If a Mistake Was Made in Relation to the Contract?
Mistakes in a contract setting can either be unilateral or mutual. A unilateral mistake is where only one party is mistaken as to one of the terms in the contract. Generally speaking, a unilateral mistake does not make the contract void, so long as the other party did not take advantage of the mistake, and the mistake was not a result of some sort of misrepresentation or fraud.
On the other hand, a mutual mistake is where both parties are mistaken regarding a key factual matter in the contract. Unlike a unilateral mistake, the existence of a mutual mistake will usually make the contract void.
Are Contracts Valid Even If They Aren’t Written?
Oral contracts are generally valid even if not supported by a written document. On the other hand, contract laws require certain contracts to be in writing in order to be enforceable in court. These laws are known as “statutes of fraud” or “the statute of frauds”.
The statute of frauds requires that the following agreements be put in writing: contracts covering the transfer or sale of land; contracts where one party agrees to pay someone else’s debts; contracts for the sale of goods worth more than $500; contracts that can’t be completed within one year (according to the contract terms); and contracts that will last beyond the lifetime of the party performing the contractual duties.
Thus, a court usually won’t honor an oral contract if it involves any of the subject matters mentioned above.
What Are Some Remedies for Breach of Contract?
There are two basic types of remedies for a breach of contract. These are: Monetary Damages and Equitable Remedies. In most contract claims, the non-breaching party must choose whether they will accept a monetary damages award or an equitable remedy.
Monetary damage awards are issued for the purpose of reimbursing the injured party for their losses. For example, if the plaintiff had already delivered goods, but didn’t receive payment as stated in the contract, the court might issue a damages award requiring the defendant to pay according to the contract. Monetary damages in a contracts claim are usually limited to compensatory damages, i.e., only those losses caused by the breach. Punitive damages are not normally awarded for a breach of contract.
Equitable remedies usually involve a court order requiring the breaching party to perform an act that would satisfy their contract obligations. For example, if the plaintiff already paid for goods, but the defendant failed to deliver them, the court might issue an injunction requiring the defendant to deliver the goods as stated.
Do I Need a Lawyer for Assistance with a Contracts Issue?
Contracts claims can involve many different overlapping issues and concerns. If you have any further questions regarding a contract, you may wish to contact a lawyer for advice. A qualified attorney will be able to provide you with legal advice and representation in court during a lawsuit.
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Last Modified: 03-30-2015 03:17 PM PDT
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