Lesson 03 - Contracts

Another element is consideration, the word itself being an example of the legalese, i.e. legal jargon used by legal professionals. In legal English it means what is exchanged between the parties to the contract. For example, if I offer my friend to buy his car the amount of money given by me is consideration from my part and the car is consideration from his part. Consideration may have various forms, such as something given, done or agreed to be refrained from.

In addition, the terms the parties have agreed to must be exact or certain. It stands to reason that the parties must be clear about what they are agreeing to but it is worth mentioning that the contractual terms may be divided into two kinds, conditions and warranties. The former are vitally important for the validity of the contract and their breach may result in terminating (discharging) the contract whereas if the latter are breached you are only entitled to seeking damages as they are of a minor importance. The English legal jurisprudence illustrates the difference between these two using two precedents from the 19th century. In the first case a singer contracted for performances of an opera fell ill before the first night and never took part in the performances. It was held that this constituted a breach of condition whereas in the other case a singer only missed rehearsals due to his illness, which was seen by the court as a mere breach of warranty.

The terms in contract may also be express or implied. The express terms are those expressed in words, either orally or in writing. The implied ones are more intriguing but if you picture a real life scene they are quite easy to understand. It suffices to recall a situation when you go to a restaurant for a dinner. In the whole process of ordering, being served and consuming the meal it is supposed without saying a word that in the end you will pay for the dinner.

It is also worth mentioning that the subject-matter of a contract must be legal. A contract between two criminals to murder someone would be unenforceable, of course, precisely because of the illegal subject-matter.

Last but not least, the parties must have legal capacity, which means that the parties must be legally qualified to enter into contractual relationships. Quite interesting may be the question if children, in legal terms minors, formerly infants, may make contracts with adults, let alone among themselves. The answer is yes but these are special contracts called voidable ones. A voidable contract may be later ratified (confirmed) or avoided (disaffirmed) by an adult. The idea behind this is that children do not have full legal capacity and adults should have power to rectify possible unfavorable situations such as when a child takes a large amount of money hidden in the parents’ drawer and buys an expensive item.

The full list of types of contract also includes oral (verbal) or written ones. You may also come across the terms executory and executed contracts; the former not being performed yet whereas the latter being already fulfilled.