The formation of a contract dates back to when two parties were exchanging something (or performing some action) for a valuable good or service. The exchange could be in the form of money, services, or barter.
Even though the contract originated from a barter system, modern legal rules regarding the formation and interpretation of contracts adhere mainly to principles from the standard law legal system, which operates even today.
Contracts are agreements between two or more people with a lawful objective to do something or purchase some product in exchange for corresponding value exchange.
Traditionally, the elements of a contract are:
- Offer and acceptance are similar to an agreement between parties or a meeting between the minds.
- Consideration is a concept in many contract law jurisdictions around the world.
In U.S. contract law, consideration is a legal concept that requires that both parties of a contract must receive some value for a contract to be valid and enforceable.
Sometimes, contractual capacity is viewed as an element of contract formation. This means that contractual capacity must be established to form a contract. Contractual capacity relates to whether or not the person (or business) is capable of entering into a contract. It identifies whether the person signing the contract is mentally sound or has sufficient legal competence.
Remedies
There are two primary forms of recovery in a contract: damages or monetary equivalent and specific performance, provided that the terms of the contract allow for such.
Both remedies awarded in A + B awarded the non-breaching party with the lost benefit of the bargain or the expectation damages.
Related Concepts
Examples of concepts related to the one you selected.
In some instances, the law has created the idea of a virtual agreement, called a quasi-contract, where none formally exists. The law prohibits the receipt of the benefit of a product without first paying the price, known as unjust enrichment.
Also, the law often views the provision of a service without payment as the equivalent of stealing because that work should rightfully be compensated by payment. This is called quantum meruit, a Latin term for "as much as he deserves."
