Find the right lawyer now

Contract Obligations

Find a Local Business Lawyer near You

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:

  • Payment:  One party (the buyer) is usually legally bound to provide payment for the sale of goods or services. The contract terms may state obligations regarding payment amounts and the deadline for payment.
  • Delivery:  The seller is usually bound to provide delivery of the goods or services. Again, the contract may state specific obligations in terms of delivery dates, method of delivery and other terms.
  • Quality of Goods:  The seller may also be bound to provide goods of a certain quality. This may be specifically described in the contract

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. 

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 04-18-2018 07:29 PM PDT

Law Library Disclaimer
  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service
What is LegalMatch?

We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.