Contract Creation

Contract Creation and Management

A contract is a legally enforceable agreement between two or more parties that creates an obligation to do or not do particular things. The term "party" can mean an individual person, company, or corporation. Almost all contracts contain some assumptions like the parties should be competent to enter a contract. For example a mentally disabled person could not enter a contract. There is also some mutual agreement between the parties i.e., all parties have a meeting of the minds on a specific subject.

Still some agreements must be in writing so that they can be enforced. Contracts are usually governed and enforced by the laws of the state where the agreement was made. The majority of contracts (i.e. employment agreements, leases, general business agreements) are controlled by the state's common law. The common law does not control contracts that are primarily for the sale of goods. Uniform Commercial Code (UCC), which is a standardized collection of guidelines for governing the law of commerce govern such contracts.

In the business world, disputes can arise over contracts, and parties may accuse the other of breaking his or her obligations under the agreement. In legal terms, a party's failure to fulfill an end of the bargain under a contract is known as "breaching" the contract. When a breach of contract happens (or at least when a breach is alleged) one or both of the parties may wish to have the contract "enforced" on its terms, or may try to recover for any financial harm caused by the alleged breach.

Resources

Reed-Shedd-Morehead-Coreley: (2004). The legal & Regulatory Environment of Business.

Retrieved