contract law essay example

contract law essay example

The Importance of Contract Law in Modern Society

1. Introduction

A contract is an agreement among two or more persons. They normally allude to an action or a series of actions that is exchanged from one party or more to another. The law of contract is the study of lawful and determining of the indenture or agreement. The major aim of the law of contract is to decide whether the indentures that are shaped are legally binding or not. A contract can be determined as an obligatory particular between two or more principal parties, people or organizations. An obliged concord may take in a service or services for money and object in the procurement agreement. This occurs in numerous contracts, mainly with consumers and retailers. For example, purchasing a loaf or a car resignation would be the service and the product, and the agreement would be the agreement of sale. The deal to exchange the contract law is the location where acceptable law is resolved, and in present days, it is the regulative decree that has developed from case law. An agreeable contract may grasp more complex contracts. For example, renting out a house is a legal agreement wherein the landlord provides a given service, commonly the letting of an apartment, for a given period in swap for a payment. The landlord has responsibilities and rights, and so does the tenant who is letting from the landlord.

2. Fundamental Principles of Contract Law

There are a number of fundamental principles which contribute to the good functioning of contract law, which are assumed when parties enter into an agreement. These are: flexibility, freedom of contract, the sanctity of contract, security and satisfaction, certainty, and finally, simplicity. These values are important as they underlie basic assumptions and policy of contract law and are reflected in the development of the law as the decisions make the law. It is important to note that quite often these principles will conflict with each other so that choosing to enforce one may lead to not enforcing another. For instance, in the case of Baird Textile Holdings Pty Ltd v Marks & Spencer plc, the need for certainty in the allocation of risk and the sanctity of contract was held to outweigh the avoidance of hardship for the defendant, the latter value not being officially supported by the law.

Contracts are negotiated between two parties who each have something the other wants and aim to reach an agreement. Essentially, a contract is a legally binding agreement. The law will effectively enforce and protect valid contracts. As a result, the function and scope of contract law is to provide a framework within which individuals can freely contract. If a problem arises, the courts will attempt to resolve the dispute by ascertaining the parties’ intentions at the time of contracting by applying the objective test. In certain circumstances, contracts will be avoided, and in other cases, the remedy will be damages. Contract law sets the rules and principles which the courts will enforce a contract and is also very important when the time comes to make a decision as to whether a contract is valid. These decisions can only be made based on the propositions of contract law.

3. Enforceability of Contracts

A final and perhaps most controversial aspect of contract enforcement is the specific performance injunction or decree compelling a party to perform the acts promised in the contract. This has been a power used as a tool in equity courts and is still frequently employed today. The current attitude of many lawyers and judges is regrettable, stating that validity is a matter of preference, not compulsion. This attitude, coupled with the belief that specific performance often involves attempting to supervise too closely the conduct of the internal affairs of a private party, has led to a variety of legislative restrictions on specific performance, most notably in the area of labor and employment law.

Generally speaking, contracts are enforced by awarding damages. It is not unusual that it is the threat of a damage award which produces voluntary compliance with contractual obligations. But threats of damages are not always sufficient, and once a contract has been found and a breach is threatened, the remedy of an action for damages may be inadequate.

Where cultural practices or marketplace standards deviate from legal rules, contract law tends to impress upon parties the ability to opt out of the default rules as significant. The increasing importance of standard form contracts has led to growing concern about the doctrine of mere preparation. This rule stated that a contract to make a contract was not itself binding. However, it has been held that the rule has been reversed to check the fact that there is a presumption of intention to create a binding agreement, and that disabling contracts are presumptively enforceable.

Under the objective test, unreasonable people are held to given manifestations and agreements unless the other party knows that they were unreasonable. This is because their unreasonableness may have arisen from ignorance, anxiety, illness or the like, in which case it is felt that the other party should bear the risk that they were not acting in accordance with their real intentions. But where such manifestations of intention and assent caused by unreasonable men cannot be given any objectively reasonable meaning, they are not enforced. It is more important to society that the strong prevailing meaning of the statement or act and intent reach an agreement on it, which is the essential issue in determining whether a contract has been formed. This reflects the historical judicial attitude that agreement is the basis of obligation and should reflect a valid exercise of the parties’ autonomy.

4. Remedies for Breach of Contract

The question of termination was discussed above. If the innocent party terminates the contract, he will have no further obligations under it. If he wrongfully terminates the contract, he can still sue for damages, but it must be remembered that “a wrongful termination can itself give rise to a claim for damages for breach of contract.” Sometimes, the innocent party may not want to terminate a contract which has been breached. For example, a builder who is owed money for work done will not want to agree to a termination of the contract if it will mean that he is unable to recover the money owed to him. If the contract is of a type which is discharged by the non-breaching party’s future performance, then the innocent party can refuse to do any further work to discharge his obligations. This will usually bring the contract to an end.

Having found that there has been a breach of a contract, the innocent party will often want to terminate the contract and be relieved of his obligations.

5. Conclusion

All in all, mankind has been and always will be a creature of agreement, and as long as that holds true, the importance of contract law in modern society is here to stay.

With the changing landscape of European society due to the influence of third world countries and globalization, interesting parallels can be drawn between the development of contract law in the US and the creation of a unified set of international trade principles by means of UCC.

According to Posner, the flurry of litigation in present-day America has not been a result of excessive regulation, but rather that people have come to the realization that trial and enforcement of promises is beneficial. Given that today’s contracts often have to be upheld in court, there are always new challenges and developing interpretations of the common law to fit the intricacies of modern society. This creates an increasing demand for lawyers knowledgeable in modern contract law.

By analyzing the plethora of contract law to date, it is logical to say that a society would be better off with a solid form of agreement law because it is the best way to uphold accountability and to mandate duty. Now, the reason why we went from the general terms of an agreement all the way to dissecting the language of the contract is because people want their agreement to hold up in court, for they want a resolution of judgment if an agreement goes awry.

One of the ways a society maintains order is by there being accountability for actions. This poses a world of benefits and drawbacks. The decision on whether to make an agreement and what sort of terms there will be is the beginning of a contract negotiation.

In our society, contracts are formed between individuals, corporations, states, and/or international organizations. Without the agreement on a set of terms, the contract will likely not be fulfilled satisfactorily or, at best, one party may just change their mind due to no enforced obligation to complete the promise. This is essentially what happens if there is no contract in an area of law. There is no set of terms and there is little obligation, the result being that there is no accountability.

The main reason why contracts lay the foundation for the rest of the law is that the very structure of society is based on agreements. Any action that is taken in a society should be the result of an agreement between the members of the society. An agreement can involve people, groups, or even a large segment of a society. This is the nature of contract law in a society of any form.

After reviewing and examining all the different aspects of law, it is evident that contracts are the most important and substantial form of law. No matter what the issue may be, contract law will always be the most important area of law. The reason for this is that contract law lays down the foundation upon which the rest of the law is built.