Legal Definitions - contract

A contract is a legally binding agreement between two or more parties. It creates mutual obligations that can be enforced by law. For a contract to be valid, it must have:

• Mutual assent, expressed by a valid offer and acceptance
• Adequate consideration
• Capacity
• Legality

If one party breaches the contract, the other party may seek remedies such as general damages, consequential damages, reliance damages, or specific performance.

Examples of contracts include:

• A lease agreement between a landlord and a tenant
• An employment contract between an employer and an employee
• A purchase agreement between a buyer and a seller

For instance, a lease agreement is a contract that outlines the terms and conditions of renting a property. If the tenant fails to pay rent, the landlord can seek remedies such as eviction or damages. Similarly, if the landlord fails to provide a habitable living space, the tenant can seek remedies such as rent reduction or repairs.

If a contract is breached, the non-breaching party may seek remedies such as:

• Expectation damages
• Consequential damages
• Reliance damages
• Specific performance

Expectation damages aim to compensate the non-breaching party for the amount of money they would have made if the contract had been fully performed. Consequential damages aim to compensate the non-breaching party for any foreseeable losses resulting from the breach. Reliance damages aim to compensate the non-breaching party for any expenses incurred in reasonable reliance on the contract. Specific performance aims to force the breaching party to fulfill their obligations under the contract.

Contracts of adhesion are a special type of contract that may be beneficial for some parties but can also be unfair or unconscionable. Examples include mortgage agreements, lease agreements, and online purchase agreements. Courts may scrutinize these contracts more closely due to the possibility of unequal bargaining power.