Mini Thesis on Contract Law

Contract Law
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Contract Law
Introduction
In the modern world, contracts have become an essential part of our existence and interactions with others. Contracts are signed across all walks of life, from businesses, legal agreements, sports, and even between governments. As such, laws have emerged to govern the creation and performance of contracts. The law of contracts is one of the most common elements of common law. In this mini-thesis, a summary of the main themes and concepts associated with contract laws is discussed. These include a definition of the term contracts as it applies to contract law, the historical background of contract law, sources and elements of contract law, the validity of contracts, and defenses and remedies offered on contract law.
Defining Contract Law
To understand what contract law is, it is important to offer an understanding of the concept of ‘contract. The Legal Information Institute defines a contract as an agreement made between private parties in creating mutual obligations that are enforceable by law. In other words, contracts become a form of promises made between parties that are to be enforced by the law. An example of a contract is where a business agrees to supply specified commodities to another for a specified amount of money. In this case, the first business (the supplier) will be obliged to deliver the commodities to the second (client) for the money paid. If the supplier received the money, then the law can force the firm to deliver what it had promised. In this case, business transactions can become simple contracts between a buyer and a seller. However, other contracts are more complex and involve sophisticated negotiations between the parties, especially in the development of the terms and conditions binding all actors.
With this definition of a contract, derivative meanings of contract law can be developed. According to Smits (2017), contract law is the set of rules and principles that govern the transactions between parties. In so doing, the contract law establishes the rights and obligations of each party to a contract. All contractual disputes are addressed using the guidelines offers in contract law, including setting remedies and determining the legality of the contract. A key point to note is that only legal contracts are subject to contract law considering that illegal contracts would not be binding.
Historical Background
A historical background illustrates how contract law has evolved since it was first established. However, it is difficult to establish when the first contract was established. Some scholars express that contract law has been the result of the development of human civilization. Such a position insinuates that contract laws have been present for as long as human civilizations have existed. Therefore, the historical roots of contract law date back to antiquity and often naturally correlate with the establishment and evolution of Roman law. Across the different countries, the development and evolution of contract law emanate from the specific country's political, economic, and intellectual revival (Bachvarova, 2019). However, classical Roman law has played a critical role in the development of the current conceptualization and practice of contract law. The rationale is that Roman law provided a systematic and separate law of contract as opposed to the early common law that lacked the same separation. In early common law, lawyers did not view disputes from the perspective of substantive rules (O'Sullivan, 2020). On the contrary, they analyzed the disputes by referring to the procedural question of form and action.
Literature on the law of contract was also late to emerge. For instance, the first recognizable textbook on the Law of Contract was published in the 19th century. For the first time, a unified philosophy on contracts and contractual disputes was developed and accepted. In this case, the classical contract theory defined contracts as bargains and a means of a reciprocal agreement. Additionally, the intentions of the parties were viewed as the basis for the contractual obligations. The classical contract theory also conceptualized the idea of freedom of contract. These are the three major threads of classical contract theory that have defined the modern conceptualization of contract law. For instance, the modern idea of a contract is that contracts have to be consensual between the parties and that the contractual obligations are mutual between the parties. Today, the world is increasingly becoming digital, which has also given rise to the idea of a smart contract. By definition, smart contracts imply a set of promises that are specified in digital terms and often include protocols that guide the parties' performance on the promises (Temte, 2019). However, the basic components of contract law remain unchanged for centuries.
Sources of Contract Law
Sources of contract law is a subject that can be perceived as an extension of the historical background to contract law. According to Smits (2017), discussing the sources of contract law means distinguishing between three types of rules that govern contract law. The three rules are party agreements, official rules, and informal rules made by unofficial institutions. The first rule, party agreements, is perhaps the most critical source of contract law. This is a special feature of contract law since agreements between individuals are considered critical determinants of what will be enforceable obligations and rights of the parties. Hardly any other field of law operates using the same principle considering that formal legal documents and statutes tend to determine what is legally enforceable. In contract law, the parties are given the freedom of contract, which simply implies that individuals can decide whether or not they want a contract and with whom, as well as determine the actual contents of the contract. Whatever is expressly agreed between the parties becomes part of the contract law.
Official sources often comprise the default rules that serve to supplement party agreements. In essence, the party agreements alone do not set all the obligations and rights of the individuals, a gap which is filled by certain default riles. Parties to a contract usually negotiate only the aspects of a contract that they consider essential. However, such agreements hardly express other contractual details, for instance, what happens when a party fails to perform the contract. Certain rules are automatically applied as long as the parties have agreed to a contract. Additionally, these rules also set the standards for determining what contracts re valid and which ones are void. National laws are also sources under official laws, often appearing in codes or national laws that govern all contracts. Unofficial institutions may also be a source of contract law. For example, such institutions as marriage can be sources of contract law binding spouses.
Besides the three sources described above, several other sources can also be considered. For example, case laws comprise rulings that have been made by judges previously. Cases with similar characteristics as those resolved before can apply the same reasoning in the rulings. International laws, including sales law, can be a source of contract law, especially when the contracting parties are from different jurisdictions.
Elements of a Valid Contract
The validity of a contract is an aspect that determines whether or not it is legally enforceable. As will be discussed later on, there are defenses that individuals who breach contracts can claim, most of which are focused on the validity of a contract. Several components comprise a valid contract: mutual assent, offer, acceptance, consideration, capacity, and legality. Without one or more of these elements, the validity of a contract is lost and so does the enforceability in law.
Mutual assent
The first element of a valid contract is mutual assent, which means that all parties to a contract have to agree. Mutual assent is required to be proven objectively and is usually established through offer and acceptance. For example, a supplier who agrees to supply goods for a certain amount of money establishes a mutually assented contract. One party makes an offer and the other either accepts or rejects it. Accepting an offer indicates that both parties have assented to be part of the contract. Traditionally, the idea of mutual assent has been referred to as the 'meeting of minds, which simply means that the parties have agreed. No individual can be tied to a contract to which he or she did not assent. This is reflected through the various defenses, including claim...