Summary of Introduction to Contract Law

## Introduction A **contract** is a legally binding agreement that creates predictable rights and duties between parties. Contracts are central to business and everyday life because they let people rely on others’ promises and seek remedies when promises are broken. > **Definition:** A contract is a legally enforceable agreement between two or more parties that creates obligations the law will recognize and enforce. ## 1. Core Elements of a Valid Contract Break the contract into its building blocks so each part is easy to follow. ### 1.1 Offer - An **offer** is a clear proposal by one party to enter into an agreement on certain terms. - Example: "I will sell you my bike for $100." > **Offer:** A proposal that, if accepted, creates a binding contract. ### 1.2 Acceptance - **Acceptance** is an unqualified agreement to the exact terms of the offer. - Example: "I agree to buy your bike for $100." > **Acceptance:** The expression of assent to the terms of an offer. ### 1.3 Consideration - **Consideration** means each side gives something of value (money, service, promise). It distinguishes contracts from gifts. - Example: The $100 paid in exchange for the bike. > **Consideration:** Something of value exchanged between parties that makes a promise enforceable. ### 1.4 Mutual Assent - Also called meeting of the minds: both parties must agree on the same essential terms. > **Mutual Assent:** The combined presence of offer and acceptance where parties share the same understanding. ## 2. Capacity and Legality - Parties must have **capacity** (e.g., age, sound mind) to contract. Example: Being 18+ and mentally competent to sign a mortgage. - The contract’s purpose must be **legal**. Example: Contracts to sell stolen goods are void. > **Capacity:** Legal ability to enter into a contract. > **Legality:** The requirement that the contract’s object is lawful. ## 3. Types of Contracts Use this comparison table to quickly see differences. | Type | Who makes the promises | Typical example | Key feature | | --- | --- | --- | --- | | Bilateral | Both parties promise | Sale where seller promises delivery and buyer promises payment | Mutual promises on both sides | | Unilateral | One-party promise | Offer of reward for returning a lost dog | Contract formed when the requested act is completed | | Adhesion | One party offers standard terms | Insurance policy, app terms | "Take-it-or-leave-it" standard form; limited bargaining | > **Adhesion contract:** A contract drafted by one party with stronger bargaining power, often offered on a standard basis. ## 4. Performance, Breach, and Remedies ### 4.1 Performance - **Performance** means the parties carry out their contractual duties. > **Performance:** Completion of contractual obligations as agreed. ### 4.2 Breach - A **breach** occurs when a party fails to perform. It can be major (material) or minor. > **Breach:** Failure to perform an obligation under the contract. ### 4.3 Remedies - Remedies aim to put the injured party in the position they would have been in had the contract been performed. - Common remedies: - **Monetary damages** (compensatory) - **Consequential losses** (for foreseeable additional harms) - **Reliance damages** (reimbursement for expenses incurred in relying on the contract) - **Specific performance** (court orders the party to perform, rare and used when money is inadequate) > **Damages:** Money awarded to compensate for loss caused by a breach. ## 5. Essential Legal Glossary (English–Czech) Use these short bilingual definitions to build vocabulary. | English | Czech | Short definition | | --- | --- | --- | | Contract | Smlouva | A legally binding agreement between parties. | | Agreement | Dohoda | A mutual understanding between parties. | | Party | Strana | A person or company involved in the deal. | | Obligation | Závazek | A duty a party must perform. | | Enforceable | Vymahatelný | A court will compel compliance. | | Offer | Nabídka | "I wil