Contract Law-Contract Formation
Contract Law is one of the largest laws that affect us all in our daily lives. Although we rarely sign a written document, we go to stores every day, we travel by public transport, especially when entering a new workplace, like all contracts that bind us in terms and conditions. Seldom known, but we are all part of the contractual obligations to both sides of the fence every day. It is therefore not surprising that the question of exactly when a contract is of great importance in the regulation of commerce and life as a consumer. On the other hand, how can we fulfill our contracts, and what rights do we have in these contracts that we agree on almost subliminal, day after day? In this article we will try to focus on some key issues relating to contract formation, and the general principles of contract law governing the operations that we experience in our daily lives.
In general laymen’s terms, we think of a contract as a detailed written document, and we understand that when we sign that dotted line, there’s no turning back. Actually, that’s a myth. Of course, there is definitely the possibility of receiving a written contract to sign, and indeed this would be legally binding. However there is a very real possibility of being legally bound to a contract that you don’t even realize exists. A contract can be formed by simply verbally saying you agree to buy some item. That is sufficient to bind you in law for most transactions, and on that basis it would be perfectly feasible to find a claim for breach. Of course, the difficulty then arises in proving what was said, which is why in practical terms, more often than not, a written document is used for transactions of a substantial nature. This avoids the problem of frivolous claims as to who said what and when such and such a term was agreed upon, which can lead to complications and lead to lengthy litigation.
Contracts are usually formed on converging offer and acceptance. This means that when you make an offer to apply for the job, and is accepted by the employer, who then forms a contract between the respective parties to the effect of the employer to the employee relationship. Usually all the vital terms of a contract will be stipulated previously, although many are implied in everyday situations, such as buying a newspaper or train ticket. These terms would also be given practical effect by the court where it would be necessary to find the necessary legal action, which is why they largely go unstipulated. Additionally, the fact that very little disputes arises from these scenarios is another good reason for the lack of clarity in the contracts needed on small transactions. But when it comes to more complex agreements, best practices dictate that putting it to writing is always important to avoid litigation problems.
Contract formation is critical, perhaps not so much on a small scale but most certainly on a large scale mostly involving commercial property transactions and employment law. It is therefore pivotal that each jurisdiction develops its own considerations of precisely when a contract is made, in order to establish a pragmatic way to resolve disputes. Naturally it is also important to maintain a cohesive structure to the law to ensure legal certainty, particularly in an area such as contract which is so vital to the success and growth of the economy, and which regulates such a large quantity of money. By ensuing standard and structure, internally at least, it is possible to give the economy a fighting chance. It is also in the best interests of everyone to harmonize laws with those of their trading partners, to ensure smoother transactions for the benefit of the economy on a wider scale.
