There are two major types of contracts; written and unwritten. Unwritten contracts are also known as oral contracts. Written contracts are usually a signed agreement between the parties. Written contracts prevail in courts of law over oral contracts when there is a dispute. Some contracts are partly written and partly oral.
I have come to appreciate the purpose of the contract in my personal life. Contracts allow parties to enter into business deals within the scope of the law. Contract formation acts as the evidence for the formation of the contract. Contract formation helps the parties to the contracts to seek reprieve in a court of law in the event of a disagreement between them. They ensure that con people and unscrupulous business people are held accountable by courts of competent jurisdiction.
For a contract to be valid all the elements of a contract must be present. These include; offer, acceptance, consideration, intention, capacity and legality. An offer is the external manifestation of a party of his or her intention to enter into a contract. Acceptance is the unconditional acceptance of the contract. Parties entering a contract have the intention to contract. Commercial transactions are considered to be under the intention to contract. On the other hand, domestic agreements do not fall under valid contracts because the parties lack the intention to contract.
Minors are not allowed into enter into contracts. In case they enter into a contract, they are allowed to rescind the contract when they reach the majority age. Contracts entered into by drunkards are not valid unless the drunkards ratify them when they are sober. Persons of unsound mind or bankrupt individuals do not have the capacity to enter into a contract. Contracts that involve illegal practices are considered to be beyond the pale of the law hence are not valid.
Contracts that fall under the statute of fraud are the contracts that must be in writing as opposed to oral contracts. Contracts involving the sale of land, marriage, contracts, insurance agreements and the contracts that its performance takes over a year are required to be in writing. Executors of a will have to enter a written contract. In my personal life I have come to realize that business transactions involving more than $ 500 must be written and fall under the statute of frauds.
When one party or both parties do not perform their contractual obligation, they are alleged to have acted in breach of contract. A breach of contract is the failure to honor the agreement between the parties. Under the doctrine of privity of contract only parties to a contract can sue for the breach of a contract even if the contract was made to benefit a third party. If there is a fundamental breach of a contract, the aggrieved party can sue for damages. A minor breach of a contract may necessitate the court to order the specific performance of the contract.
If the contractual rights of one of the parties are violated, the innocent party is entitled to a remedy. The courts can order; specific performances of the contract, order an injunction to the innocent party, or choose an official receiver. It’s upon the court to decide which remedy should be given to the innocent party.
In conclusion, the courts do not interfere with the contractual rights of the parties to a contract. They only come in when there is a dispute. Under the doctrine of freedom of contracts, individuals who receive unfair bargains in a contract cannot get a reprieve in a court of law so long as the due process was followed.
Reference
Wishart, M. (2012). Contract Law. London: Oxford University Press.
