Contracts are an important part of everyday life. They are an essential part of business. As a student of a business law class, I will discuss in this paper several aspects of contracts. This paper will give a definition of a contract and the essential elements necessary to form a valid contract. It will briefly discuss breach of contract and the difference between a material breach and a nonmaterial breach of contract. Examples of legal and equitable remedies available for breach of contracts will be highlighted. Also, legal excuses for nonperformance or other grounds for discharge of contracts will be addressed. Finally, three types of common contracts personally and professionally encountered will be mentioned.
A contract is an agreement between parties that is enforceable by law (Melvin, 2012). Transactions conducted within the business world and by individuals that involve commitments to provide goods, services, or real property are usually in contract form. When one party makes an offer to another and they reach an agreement, a contract is formed. An agreement reached between the cooperating parties contains a promise, for example, one party agrees to sell a vehicle for $500 and the other party accepts and pays the money then receives the merchandise. This constitutes an acceptance of assent between parties showing that the parties agree with the terms offered. To ensure fairness of trade for goods and services, contracts are enacted between individuals in the event one party breaks their promise or breaches the contract.
A breach of contract is when a party to an agreement owes a duty to perform and fails to fulfill her obligation (Melvin, 2011). A material breach of contract is when the non-breaching party did not receive the main benefit of the bargain or contract. An example of a material breach is when a homeowner contracts an electrician to install high grade wires for safety reasons and instead the electrician installs
References: Legal match. Material breach of contract. Retrieved 12/26/12 from: http://www.legalmatch.com/law-library/article/material-breach-of-contract.html Mayer, D, Warner, D. Foundations of business law and the legal environment. Retrieved 12/26/12 from: http://catalog.flatworldknowledge.com Melvin, S.P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, NY: McGraw-Hill/Irwin. The lectric law library. Retrieved 12/26/12 from: http://www.lectlaw.com/files/bul08.htm