Contract Obligations

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What Are Contract Obligations?

Contract obligations are those duties that each party is legally responsible for in a contract agreement. In a contract, each party exchanges something of value, whether it be a product, services, money, etc. On both sides of the agreement, each party has various obligations in connected with this exchange.

An example of contract obligations is with the sale of a product such as an automobile. One party has the obligation to transfer ownership of the car, while the other has the obligation to pay for it. The contract will specify the terms that regulate the obligations, such as the method and amount of payment, and the time/place of delivery. 

If either party fails to perform their contractual obligations according to the contract terms, it will usually result in a breach of contract. This may result in a damages award to reimburse the non-breaching party for their economic losses.

What Are Some Examples of Contract Obligations?

As mentioned, contract obligations generally depend on the specific subject matter of the contract. Contract obligations for a sales contract may be much different than other types of contracts, such as a rental agreement contract. However, most legal agreements contain some of the same types of contract obligations, such as:

These types of obligations can vary according to the individual details of the contract. In addition to these specific obligations, each party in a contract is also bound by certain general principles and obligations when forming the contract. 

For instance, each party is obligated to deal fairly and truthfully with the other party, and each party is also obligated to refrain from using force or coercion in obtaining the agreement.

Can Contract Obligations Be Transferred to Another Party?

In some cases, contract obligations can be transferred to a third party. For instance, if one party is obligated to paint the other party’s house, they can sometimes hire an outside party to do the painting for them. This is known as “contract delegation”.  Contract delegation may or may not be allowed for all obligations; the ability to delegate a contract duty may depend on the type of obligation as well as state contract laws. 

For instance, a contract obligation usually can’t be delegated if it involves unique craftsmanship or artistic ability that can only be performed by the specific party to the agreement. 

Transference of contract rights (in contrast to the duties) is known as “contract assignment”.  

Do I Need a Lawyer?

Contract obligations will be different in each individual claim. You may need to contact an experienced contracts attorney if you have any disputes or legal questions about a contract obligation. Your lawyer can provide you with legal research and guidance to address your inquiries about contract obligations. In addition, if you need to file a lawsuit for a violation of contract obligations, your attorney can provide you with assistance and representation in court. 

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Last Modified: 05-27-2014 10:57 AM PDT

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