Law of Contract
Law of contract is based on the Latin phrase ‘pacta sunt servanda’, which means ‘promises must be kept’. The law will carry out necessary actions whenever a contract is breached by an individual or party.
A contract is any agreement which can be enforced in Court, provided the people involved are fully aware of the terms and give their consent to it. Contracts are made by almost all individuals on a daily basis, often without fully realising it. Written contracts can be required, such as when buying a house, but the majority of contracts are verbal, such as when you buy a drink at a shop.
Law of contract helps to ensure that if a problem arises, the person to blame can be identified, and a solution can then be found. It is therefore essential that anyone making a contract checks every detail thoroughly, to ensure all loopholes and pitfalls are spotted, and suitably amended. This protects people from finding themselves in a bad, legally-binding situation, unable to rectify it.
If someone fails to perform their contractual obligations, the innocent party is allowed to stop performing their own obligations and instead seek compensation, equalling what they would have received if the contract was fulfilled.
For some major transactions, such as purchasing land, the law of contract can require you to have witnesses and signatures when the contract is made. In England the law can also require each party to offer a valuable item in order to guarantee the transaction will happen. This is known as ‘consideration’.