Contracts

Contracts are legally binding agreements between two or more parties that establish or modify rights and duties. They can be written, oral, or implied by conduct. Most systems require a valid offer and acceptance, consideration or a comparable exchange, an intention to create legal relations, capacity to contract, and legality of purpose. Some contracts must be in writing or satisfy formalities to be enforceable, under rules such as the statute of frauds.

Formation and content: An offer states a willingness to enter into an agreement on specified terms; acceptance agrees to those terms and creates mutual assent. Consideration is the value exchanged, though some jurisdictions recognize alternative forms such as deeds. Contracts may be express (stated terms) or implied (inferred from conduct). They can be oral or written, and many are standard form contracts with boilerplate clauses.

Performance and breach: When parties fulfill their promises, the contract is discharged. A breach occurs when a party fails to perform, delays, or departs from essential terms. Remedies include damages designed to put the injured party in the position they would have been in, and may include liquidated damages. Specific performance or injunctions may be available for unique subject matter. Parties typically have a duty to mitigate losses, and contracts may be terminated by performance, breach, or supervening impossibility or illegality.

Enforceability and interpretation: Courts interpret contract terms and resolve ambiguities according to the contract as a whole and governing law. Defenses to enforcement include misrepresentation, duress, lack of capacity, illegality, coercion, or unconscionability. Contracts may allow assignment or delegation of rights and duties, though with limitations. The contract lifecycle may involve amendments, novation, renewal, or termination, and disputes are often governed by specified forum and law.