Contract Law

A contract

In law, it all boils down to this. Do not harm others and honour thy words. Simple huh. What this means is that all you really need to know about the law is in your contract (otherwise known as your promise to perform.) Never make promises you do not understand or cannot complete! Ever! Most of the ills of the world are due to people doing this.

A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money.

If you have any doubts about the law, ask to see your contract. Your answers are there. Without a contract, there is no obligation for you to perform and you cannot be held liable for such invitations.

What's is a signature?

When you sign a document you are placing your mark of approval on the statement. Usually confirming it as a statement of your own truth. Usually taking the form of letters, statements, notices and affidavits.

Two or more signatures together on one document indicates group approval of a statement. Usually as covenants, constitutions, contracts and petitions.

A third party may be asked to add their signature as evidence that they witnessed the transaction. (Two witnesses is customary in Maritime Law.)

You are not party to a written statement unless your signature is upon it. This includes national constitutions. A trick most people miss.

At least two separate parties (two signatories) are required to enter into an agreement. The agreement can be between two individuals, between an individual and a company or between a company and another company.

What makes a contract valid?

The following conditions must be met before any contract can be deemed valid:

  1. Offer and acceptance (A meeting of the minds or mutual assent)
    Mutual assent is reached through offer and acceptance, that is, when an offer is met with acceptance that is unqualified and does not vary from the offerer's terms. The latter requirement is known as the "mirror image" rule. If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the original offer.
  2. Consideration
    Consideration is something of value given in exchange for something else of value. Typically, the thing of value is an act, such as making a payment, or refraining from action when one is privileged to do so.
    Consideration must be sufficient, but courts will not weight the adequacy of consideration. For instance, agreeing to sell a car for a penny may constitute a binding contract. All that must be shown is that the seller actually wanted the penny. This is known as the peppercorn rule. Otherwise, the penny would constitute nominal consideration, which is insufficient. Transfer of money is typically recognized as an example of sufficient consideration, but in some cases it will not suffice, for example, when one party agrees to make partial payment of a debt in exchange for being released from the full amount.
  3. Ability to contract
    The contractors must be able to complete the deal.
  4. Agreement
    The contractors must be willing to complete the deal and must say it is so.
  5. Lawfulness
    The contract may not contradict any prior law (agreement) unless it is a re-negotiation of that law.
  6. Proper form
    Some cultures will only accept a contract in a certain form. For example, most banks will only accept mortgages in a written form drafted to meet certain specifications.

A forced contract is not a valid contract

You cannot be held liable for a contract unless it is valid. A contract is not considered legally binding if the party entering into the contract is under duress. "Under duress" means a person is being forced to sign a document against his will, whether by overt or covert threat. A contract can be nullified if the party can prove duress.

If you are being forced to sign a contract, make sure you write “signed under duress” before your signature. This will invalidate the contract. In a similar manner, a contract can be voided if the party is inhibited or incapacitated by drugs, alcohol, injury or mental impairments.

Contrary to what some people will have you believe, a contract is always open for re-negotiation or termination.
It must be this way because circumstances are fluid the future can only be guessed at. An irreversible contract is an enticement to slavery. Which is universally recognized as a bad thing.

Breach of contract

A party who has agreed to a valid contract can be held in breach of that agreement in a court of law. When one party seeks legal recourse against another for breach of contract, that party must re-evaluate the contract based on the six elements. These elements are essential in showing that one party did not live up to his end of a valid contract.

The plaintiff (a person who brings a case against another in a court of law) must prove that:

  1. The contract was valid.
  2. One party did perform according to the contract.
  3. The other party failed to perform according to the contract agreement.
  4. Damage was incurred and must be compensated.