contract, in law, a promise, enforceable by law, to perform or to refrain from performing some specified act. In a general sense, all civil obligations fall under tort tort, in law, the violation of some duty clearly set by law, not by a specific agreement between two parties, as in breach of contract . When such a duty is breached, the injured party has the right to institute suit for compensatory damages .
..... Click the link for more information. or contract law. Torts are usually characterized as violations of duties that are imposed on all persons and that have been established entirely by law. In contracts, on the other hand, the parties determine, at least in part, what their obligations to one another will be. Special types of contracts are given separate articles, e.g., negotiable instrument negotiable instrument, bill of exchange, check, promissory note, or other written contract for payment that may serve as a substitute for money. It is simple in form and easy to transfer.
..... Click the link for more information. , insurance insurance or assurance, device for indemnifying or guaranteeing an individual against loss. Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts, called premiums.
..... Click the link for more information. , and deed deed, in law, written document that is signed and delivered by which one person conveys land or other realty (see property ) to another. A deed may assure the extent of the conveying party's ownership or, if the party is uncertain of the precise extent, he issues a
..... Click the link for more information. .

Criteria for Enforcement

For a contract to be valid, both parties must indicate that they agree to its terms. This is accomplished when one party submits an offer that the other accepts within a reasonable time or a stipulated period. If the terms of the acceptance vary from those of the offer, that "acceptance" legally constitutes a counteroffer; the original offering party may then accept it or reject it. At any time prior to acceptance, the offer may be rescinded on notice unless the offering party is bound by a separate option contract not to withdraw. Only those terms expressed in the contract can be enforced; secret intentions are not recognized. For a contract to be binding, it must not have an immoral or a criminal purpose or be against public policy.

Other criteria for the enforcement of contracts have varied. In the earliest type of enforceable promises, it was the form of the contract (e.g., a sealed instrument) or the ceremony accompanying its execution that marked the essence of the transaction; contracts not sealed or not dignified by ceremonies held a lesser status, and were therefore not always enforceable. The importance of promises in commercial and industrial society produced a new criterion, and generally a promise is now enforceable only if it is made in exchange for consideration, i.e., a payment, for some action, or for another promise. In some jurisdictions, statutes have made certain promises enforceable without consideration, e.g., promises to pay debts barred by the statute of limitations. To be enforceable, most contracts must be in writing, to comply with the Statute of Frauds (see Frauds, Statute of Frauds, Statute of, basis of most modern laws requiring that certain promises must be in writing in order to be enforceable; it was passed by the English Parliament in 1677.
..... Click the link for more information. ).

Since a contract is an agreement, it may be made only by parties with the capacity to reach an understanding. Therefore, individuals suffering from severe mental illness are unable to make binding contracts. Until the late 19th cent., married women were also without contractual capacity, because at common law they were considered the creatures of their husbands and without wills of their own (see husband and wife husband and wife, the legal aspects of the married state (for the sociological aspects, see marriage ).

The Marriage Contract

Marriage is a contractual relationship between a man and a woman that vests the parties with a new legal status.
..... Click the link for more information. ); this disability has been removed by statute universally. Minors are not bound by their contracts, but they are responsible for the value of goods received in contracts made for necessities of life. Otherwise, a minor may denounce his contracts at any time and on attaining majority may elect whether to affirm or repudiate them (see age of consent age of consent, the age at which, according to the law, persons are bound by their words and acts. There are different ages at which one acquires legal capacity to consent to marriage, to choose a guardian, to conclude a contract, and the like.
..... Click the link for more information. ).

A contract must also be the uncoerced agreement of the parties; thus, if it is procured by duress duress (dy`rĭs, d
..... Click the link for more information. or fraud fraud, in law, willful misrepresentation intended to deprive another of some right. The offense, generally only a tort , may also constitute the crime of false pretenses. Frauds are either actual or constructive.
..... Click the link for more information. it is void. A contract can be unenforceable if it is so one-sided as to be found unconscionable, where the terms are unreasonably favorable to one party; often the material that constitutes unconscionability is buried in fine print or expressed in obfuscatory jargon. Adhesion contracts, which afford no occasion for the weaker party to bargain over their terms, are often offered to purchasers of consumer goods and services, but are not necessarily unconscionable.

Termination of Contracts

While a contract is still wholly or partly unperformed it is termed executory; contracts may terminate, however, in ways other than by being fully executed. If the object of the contract becomes impossible or unlawful, if the parties make a novation (a new superseding agreement), or if the death of one party prevents that party from rendering personal services he or she had agreed to perform, the contract is terminated. The injured party may also treat the contract as a nullity if the other party refuses to perform. The law provides several remedies for breach of contract. The most usual is money damages damages, money award that the judgment of a court requires the defendant in a suit to pay to the plaintiff as compensation for the loss or injury inflicted. Damages are the form of legal redress most commonly sought.
..... Click the link for more information. for the loss incurred. In cases where some action other than the payment of money was contracted for, a court may grant the plaintiff an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity , is used especially where money damages would not satisfy a plaintiff's claim, or to
..... Click the link for more information. ordering specific performance. If one party is unjustly enriched by a contract that he or she then repudiates legally, restitution may be required. A typical example of this is ordering a minor who revokes a contract to restore the things of value that were obtained.

Bibliography

See studies by E. J. Murphy and R. E. Speidel (1984); H. Collins (1986); R. B. Summers and R. A. Hillman (1987); P. S. Atiyah (1988).

contract

Agreement between two or more parties that creates for each party a duty to do something (e.g., to provide goods at a certain price according to a specified schedule) or a duty not to do something (e.g., to divulge an employer's trade secrets or financial status to third parties). A party's failure to honour a contract allows the other party or parties to bring an action for damages in a court of law, though arbitration may also be pursued in an effort to keep the matter confidential. In order to be valid, a contract must be entered into both willingly and freely. A contract that violates this principle, including one made with a legal minor or a person deemed mentally incompetent, may be declared unenforceable. A contract also must have a lawful objective.