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Student Legal Services - ASUW


Contracts are part of everyday life, arising in business and between individuals all the time. Some contracts are casual and informal but others are more official and can be enforced by law. All societies work with an expectation that when a person says he or she will do something, it will be done unless something unexpected occurs that would prevent him or her from doing it. As society has become increasingly complex, it has also become necessary for the legal system to define peoples' rights and duties as well as provide ways to enforce promises or to give remedies when a party fails to perform his or her end of the contract.

Contracts are promises that the law will enforce. The law will provide remedies to people if a promise is broken, or if the performance of the promise is considered a duty. A contract occurs when a duty comes into existence, because of a promise that one of the parties made. For a contract to be considered legally binding, that is, for the law to enforce the contract, a promise must be made in exchange for what the law calls consideration. Consideration is either a benefit or a detriment that one of the parties gets that fairly and reasonably causes them to make a promise to someone else. For example, a promise that is purely a gift and is not given in exchange for anything else is not an enforceable promise, because merely the personal satisfaction that the giver of the promise experiences is usually not considered adequate. When a promise is made in exchange for adequate consideration, this constitutes a contract. Sometimes, promises that are not considered to be contracts might be enforced if one party has relied on the assurances of the other party to his or her detriment.

The basis of contracts is an agreement between parties. If a contract is in dispute, the courts will ask if a promise was in fact made, and if it was sufficiently definite to define the different rights and obligations between the parties. There will also be a question as to whether or not the person making a promise had sufficient intent to become legally bound which differentiates casual promises from legally-binding contracts.

A good example of a binding contract might look like this: "I will buy your car for $3000." "I accept." A clear offer has been made: to buy the car. The offer has been accepted. There is consideration for the promise in the form of a $3000 payment. This is a valid contract. A signature is not always required for a binding contract to exist. If either the buyer or the seller of the car broke his or her promise to pay or to sell, there could be a remedy that the law would provide. If a party goes to court because of a breach of contract, there are different ways that the law will help the person complaining.

Often before a final contract is agreed to, parties will have discussions and go back and forth until they come to a final agreement of the specific terms they desire, before shaking hands (literally or figuratively) and showing that they assent to the agreement.

Some contracts are governed by state laws as well as private law. Some state laws will require that certain kinds of contracts be in writing to be valid (usually contracts that will last more than a year or involving the sale of land). Otherwise the parties may enter into a binding agreement without signing a formal written document.

The students' attorney can help you understand what your rights and duties are in a contract that you have entered into or are considering entering into, what might happen if you cannot perform your end of a contract or the other party is in breach of a contract, or if you just need help to understand the terms. 

Please Note: This article about legal contracts was written by Megan Holbrook, a University of Wyoming College of Law student, and supervised by Student Legal Services.

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