This text deals with some of the main features of contract law.

2. Read the first paragraph. What is necessary for a valid contract to be formed?

3. Now read the whole text. Which two remedies following a breach of contract
are mentioned? Are any other options available in your own jurisdiction?

4. Read the text again and decide whether these statements are true (T) or false (F).

1 In all legal systems, parties must give something of value in order for a contract to be formed………………

2 An offer must be met with a counter-offer before a contract is agreed………..

3 Oral contracts are not always valid…………..

4 If in breach, the court will always force the party to perform the contract……..

5 Assignment occurs when one party gives its contractual rights to another party………..

Contract law deals with promises which create legal rights. In most legal systems, a contract is formed when one party makes an offer that is accepted by the other party. Some legal systems require more, for example that the parties give each other, or promise to give each other, something of value. In common-law systems, this promise is known as consideration. In those systems, a one-sided promise to do something (e.g. a promise to make a gift) does not lead to the formation of an enforceable contract, as it lacks consideration.

When the contract is negotiated, the offer and acceptance must match each other in order for the contract to be binding. This means that one party must accept exactly what the other party has offered. If the offer and acceptance do not match each other, then the law says that the second party has made a counter-offer (that is, a new offer to the first party which then may be accepted or rejected).

For there to be a valid contract, the parties must agree on the essential terms. These include the price and the subject matter of the contract.

Contracts may be made in writing or by spoken words. If the parties make a contract by spoken words, it is called an oral contract. In some jurisdictions, certain special types of contracts must be in writing or they are not valid (e.g. the sale of land).

Contracts give both parties rights and obligations. Rights are something positive which a party wants to get from a contract (e.g. the right to payment of money). Obligations are something which a party has to do or give up to get those rights (e.g. the obligation to do work).

When a party does not do what it is required to do under a contract, that party is said to have breached the contract. The other party may file a lawsuit against the breaching party for breach of contract. The non-breaching party (sometimes called the injured party) may try to get a court to award damages for the breach. Damages refers to money which the court orders the breaching party to pay to the non-breaching party in compensation. Other remedies include specific performance, where a court orders the breaching party to perform the contract (that is, to do what it promised to do).

A party may want to transfer its rights under a contract to another party. This is called an assignment. When a party assigns ('gives') its rights under the contract to another party, the assigning party is called the assignor and the party who gets the rights is called the assignee.

Complete these sentences using the words in the box.

breach counter-offer damages formation obligations oral contract terms

1. Usually, contract............ occurs when an offer is accepted.

2. A new offer made by one party to another party is called a

3.The price and the subject matter of a contract are the essential
of a contract.

4. A contract which is not in written form but has been expressed in spoken
words is called an................

5. Under a contract, a party has.......... (that is, certain things it has to do).

6.When a party does not do what it has promised to do under a contract,
it can be sued for.............. of contract.

7.A court can award.... '..... , to the non-breaching party.