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Understanding Contract Rights

If you are concerned with contract rights or a breach of contract, the best way to develop understanding of your contract rights is to consult with a lawyer who specializes in contract laws. To have a qualified lawyer contact you, simply fill out the form below.

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Basic Contract Rights

To develop an understanding of contract rights, it is necessary to know what exactly a contract is. Basically, a contract is a legal agreement that binds all of the parties of the contract to the promises contained in the agreement. Because it is a legally binding agreement, the parties have contract rights that protect the fulfillment of the promises made in agreement. If the terms of the contract are not fulfilled a breach of contract occurs and through the use of contract laws, remedies to the broken contract can be determined in a court of law.

Most people don't know that contract rights exist even in an oral contract. An oral agreement is hard to prove in a court of law so most times serious contracts are entered through a written agreement so that the terms are clear and concise. It is easier to prove contract rights in a court of law if the agreement is documented in a written agreement.

Contract laws sometime combine with other laws, like real estate laws, that actually require the contracts to be in writing in order to be enforced in the court system. For instance, agreement to sell or purchase real property must be in writing to be a legal binding agreement with contract rights that assure the fulfillment of the agreements.

Contract rights are also somewhat limited in contract laws whereas the parties to a contract have to have the capacity to contract. Also, there are no contract rights if the agreements are illegal, insignificant, impossible to fulfill or undefined.

Contracts, contract rights and breach of contract terms are addressed in both common law and civil law systems as well as statute law which can be confusing to a layman, so it is always best to consult with an attorney who specializes in contract laws to get a clear understanding of your contract rights and the potential for remedies in case of a breach of contract.

Generally, the creation of a contract that holds up contract rights under common law has to meet five requirements...

It has to contain an offer and an acceptance
It has to have consideration
The parties have to have the intention to create a legally binding agreement
The parties have to have the legal capacity to enter a contract
It must define formalities

An agreement that meets all of these requirements constitutes contract rights that can be upheld by contract laws if the agreements made are not illegal, impossible to fulfill, insignificant or undefined and if the specific transaction is not covered by other more definitive laws such as real estate law.

There are a few instances in which a contract can be found void or unenforceable through contract laws. In such cases, the contract is set aside or rescinded which means that the contract is not effective and contains no contract rights whatsoever; therefore, a breach of contract cannot be determined and contract rights cannot be upheld. These instances include misrepresentation, mistakes, duress or undue influence, incapacity of one or more parties, and of course illegal agreements.

Misrepresentation that can void the contract and contract rights refers to a false statement or a fraudulent statement made by one party to the other that induced the other party into the contract. It can also apply if one party did not realize that they were entering a contract. In a case of misrepresentation, the person to whom the misrepresentation was made to might have contract rights for collecting damages depending upon the type of misrepresentation that was made.

Mistakes in contract relate to the understanding of the parties of a contract and misunderstanding can be used to void the agreement. Such misunderstanding can be common, mutual or unilateral; however, in such a situation that contract can be rescinded along with the contract rights that were assumed.

Duress and undue influence refer to one party making threats to the other party in order to influence them into entering a contract. If one party can prove that a threat was made, the other party has to prove that the threat did not affect the other party's action of entering the contract. A contract that can be proven to be created under duress or undue influence can be rescinded with the contract rights canceled.

Incapacity to contract can relate to several issues and a contract made with someone who was incapacitated at the time of making the contract can be determined unenforceable while voiding contract rights. For instance, a child or someone who is mentally incapacitated and could not understand the contracted terms is unable to create a legally binding agreement under contract law. Therefore, if such instances can be proven, the contract and contract rights can be set aside in the court of law. It is important to realize the mental incapacity can refer to drunkenness as well as disabilities such as mental retardation, mental illness or dementia. Also, an employee who contracts for the company and doesn't have to power to contract for the company can also result in a contract being voided.

If the terms in a contract are illegal, the agreement and associated contract rights will not possibly hold up in a court of law under contract laws. Terms that are associated with waiving protections provided by law can actually void the contract entirely if it can be determined to be an illegal agreement.

Most times, a matter concerning contract laws comes to court due to a breach of contract or violation of contract rights. A good contract that meets the minimum requirements contains contract rights that protect both parties concerning the agreements made in the contract whether written or verbal. Specifics are more easily proven in written contract; however, a verbal contract can contain contract rights in many cases.

If a breach of contract exists in a valid contract, monetary damages can be awarded to the non-breaching party or a specific performance of the breaching party may be ordered due to the contract rights of the party who is affected by the breach of contract.

The damages awarded due to a breach of contract under contract laws can consist of compensatory damages, exemplary damages, liquidated damages, nominal damages, or punitive damages.

Compensatory damages aim to protect rights by awarding actual damages to the prevailing party including direct damages and consequential damages. The damages may be calculated using expectation damages, reliance damages or restitutionary damages methods in regard to a breach of contract concerning the contract rights of the non-breaching party.

Contracts laws do not always allow for exemplary damages because the purpose of it is basically to set an example for others to discourage criminal involvement. However, if the contract rights include the right to receive exemplary damages, regular fines can be multiplied in order to meet the purposes of imposing such damages.

Liquidated damages are usually covered in the contract rather than set by contract laws and are based on estimates of losses that will occur if a breach of contract occurs. Such contract rights are actually developed in the commencement of the contract.

Nominal damages are usually awarded in cases that seek to create a legal record of who was at fault in a breach of contract. Such instances usually include a small monetary award to the prevailing party.

Punitive damages are not usually awarded in relation to a breach of contract; however, they may be involved if the case displays fraudulent activity. The purpose of such damages is to punish the party who at fault for making fraudulent misrepresentations to the other party; however, some contract laws prohibit such damages so it is not safe to assume that contract rights include the ability to receive punitive damages.

Examples of Contract Rights, Breach of Contract and Contract Laws

It is important to realize that each situation is unique and although basic contract rights are established by contract laws, the outcome of a breach of contract may be different depending on particular circumstances and the state in which the contractual agreement occurred. In regard to signing a contract or dealing with a breach of contract, it is always best to contact an attorney who practices contract laws for advice and to determine your contract rights in your particular situation.

Here are some examples of contract laws, contract rights and breach of contract cases from state to state.

California Contract Rights: Under California contract laws, an agreement made for the benefit of a third party can be enforced by the third party if the agreement has not been rescinded even though the third party is not a promissee in the contract.
Texas Contract Rights: In Texas, the right to cancel a contract is somewhat protected by consumer rights and protection laws. For instance, if an agreement is considered one-sided, being unfair to a consumer, the consumer may be determined to have the right to cancel the contract.
Pennsylvania Contract Rights: Under Pennsylvania contract law, only three elements are required in order for an agreement to be considered a contract. The elements are an offer, an acceptance and consideration. Defenses to the existence of an enforceable contract include legality of the contract, capacity of the parties, mistake, duress, fraud, unconscionably, statute of fraud, and the parole evidence rule.
Florida Contract Rights: Consumer protection laws in Florida allow a cooling off period in which a consumer can back out of contract in regard to large purchases that are covered by the laws.
Ohio Contract Rights: Under Ohio contract laws, a duty to mitigate is addressed in regard to a breach of contract.
Michigan Contract Rights: Under Michigan contract laws, the recovery of damages in regard to a breach of contract is limited to damages that occur naturally due to the breach or that were contemplated by the parties when making the contract.
New York Contract Rights: New York contract law is quite original because unlike most other states, the state has not adopted the Uniform Arbitration Act which is a law that intends to synchronize applicable laws throughout the states.
Georgia Contract Rights: Under Georgia contract laws, very few contracts have contract rights regarding canceling the contract during the "three day cool off period". There are specific instances that make the cooling period applicable.
Arizona Contract Rights: Contract laws in Arizona address the interference with a contract from a third party. One party of the contract can actually sue the third party if the third party intentionally interfered with the contractual relationship and a breach of contract or termination is the result in which the pursuing party experiences harm or damages.
North Carolina Contract Rights: In North Carolina, if a contract is entered due to home solicitation, the person who entered the contract as the purchaser can cancel the contract within three days of the purchase.

Contract laws do vary from state to state as do the contract rights that apply to contracts and transactions. A breach of contract may be handled differently due to the variation of contract laws and contract rights. If you are concerned about the legal ramifications of a contractual relationship or breach of contract, it is best to contact an attorney who practices contract laws to find out exactly what your rights are.