What is a Contract?

A contract is an agreement between two or more parties to fulfill a certain promise or carry out certain actions. The law enforces such promises as legal rights and obligations.

Contracts need not always be in writing. They can also be made orally or implied by the action or behaviour of any party or person. They can also be a “mixture”: partly written, and/or partly oral and/or partly by conduct. If any party fails to live up to his/her side of the contract, there would be a “breach” of contract. An important part of contract law is to decide what should be done about the breach of contract.

Q: Why does the law enforce a contract?

To make people stand by the promises they have made as part of a bargain.

It is probably reasonable that the law enforces contracts since most people expect a promise to be kept.

But should every promise be enforced as a contract? What if the promise was made by someone who was tricked, or pressured, or even threatened, into making that promise? Therefore, although “a promise is a promise” morally, it should be legally treated as an enforceable contract only when it is obvious that the promise was given as part of a deal or bargain. In other words, the promiser must get something valuable in exchange for his promise. This “something valuable” need not be exactly the same value as what he had promised.

Furthermore, if we simply enforced all promises, people may be suing on frivolous promises all the time, such as “I promise to be punctual for our dinner date; or else I’ll pay you $1 million”.



People have different opinions about what is “reasonable”, “valuable” or “worthless”. This is one of the main reasons for the thousands of cases and rulings by judges regarding contracts. Some of them look like they have directly opposing ideas. A lawyers’ skill and experience is required to study and “arrange” these decided cases into a useful “package” for you to prepare a contract or argue a case in court. You can treat these situations as a “fairness” contest. The lawyers are like the specialists hired to help you look your “fairest”.