Contracts: nature of contracts, contract laws, elements of contracts
To begin with I would like to determine the term “contracts”. Contracts are promises that the law will enforce. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the otherparty.
Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document.
Over the years the common law courts developed a number of requirements that a promise had to meet before it would be considered a contract. These are:
An agreement (an offer and an acceptance of the offer);
Voluntarily entered into;
By parties having capacity to contract;
Supported by consideration (with some exceptions);
To do a legal act or acts.
In addition to these elements, the courts required written evidence of some kinds of contracts.