Contractual agreements

The world in which we live today is full of contractual agreements. When you buy a car, purchase a house or just buy a cup of coffee you are entering a contractual agreement. A contractual agreement is a legally binding exchange of promises or an agreement between parties that the law will enforce. Contract law is based on the Latin phrase pacta sunt servanda (literally, promises must be kept). Breach of a contract is recognised by the law and remedies can be provided. Almost everyone makes contracts everyday. Sometimes written contracts are required, for example when buying a house. However the vast majority of contracts are made orally, like buying a book, or a coffee at a shop. Contract law can be classified as part of a general law of obligations.

In order to enter into a contractual agreement both parties must be capable of doing so. That is to say that both parties must be able to understand the terms of the contract into which they are entering, and the consequences of the promises that they make. For example, animals, minor children, and mentally disabled people do not have the capacity to form a contract, and any contracts made with them will be considered by the law as being void. Corporations are considered to be persons under the law, and so they are able to engage in contracts.

From time to time an individual may find himself in the position of needing to come to a contractual agreement with a second party. This might be a mutually agreed upon contract that is drawn up between an employer and a new employee. It may be when one individual is purchasing a business from a second and they each need a contract governing the terms of the sale of the business. Many contractual agreements such as these can be found on the Internet, and after being downloaded can be adapted to fit the required terms. However, such agreements should always be checked by a qualified attorney to ensure that it complies with the Laws of the country.

Perhaps the most important feature of a contractual agreement is that one party makes an offer for a bargain that another accepts. This can be called a 'concurrence of wills' or a 'meeting of the minds' of two or more parties. Offer and acceptance does not always need to be expressed orally or in writing. An implied contract is one in which some of the terms are not expressed in words. This can take two forms. A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a checkup, a patient agrees that he will pay a fair price for the service. If he refuses to pay after being examined, he has breached a contract implied in fact.

If you have any questions regarding contractual agreements you should consult an attorney for advice.