When I was in law school, I hated contract law. My professor seemed primarily interested in discussing the history and philosophy behind the law. I felt mired down in the complexity and didn’t understand why more time wasn’t spent talking about the basics. I now realize that after teaching contract law for upteen years, my law professor was probably bored out of his mind. It’s the complexity in contract law that’s interesting.
At it’s core, contract law is simple. A contract is a bargained for exchange of promises.
There are three primary elements of an enforceable contract:
1) an offer
2) acceptance and
Party A makes an offer. Party B accepts the offer.
“Consideration” is a fancy term for the bargained for exchange. Even token consideration is sufficient to make a contract enforceable. Courts make it a policy not to look at the adequacy or value of the exchange. The classic example is that a peppercorn is enough payment.
The Internet made things tricky. Proving the existence of the basics got hard. When negotiations were no longer face-to-face or phone-to-phone, it became difficult to determine whether an enforceable contract had been formed.
Who were the contracting parties? Did Party B even have notice of the offer or its terms? What is acceptance in an electronic environment?
Contracts are integral to business and understanding the basics of contract law, especially in an electronic environment, can be critical for your business.
So, in future posts, I’ll explain some of the simple concepts and issues in contract law. Even though it can sometimes be boring, contract law is important.
I’ll try not to be confusing and talk about contract history, philosophy or complexity.
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