Contract

A contract is a legally enforceable agreement that creates, defines, and governs mutual rights and obligations among its parties.[1] A contract typically involves the transfer of goods, services, money, or a promise to transfer any of those at a future date. In the event of a breach of contract, the injured party may seek judicial remedies such as damages or rescission.[2] Contract law, the field of the law of obligations concerned with contracts, is based on the principle that agreements must be honoured.[3]

Contract law, like other areas of private law, varies between jurisdictions. The various systems of contract law can broadly be split between common law jurisdictions, civil law jurisdictions, and mixed law jurisdictions which combine elements of both common and civil law. Common law jurisdictions typically require contracts to include consideration in order to be valid, whereas civil and most mixed law jurisdictions solely require a meeting of the minds between the parties. Within the overarching category of civil law jurisdictions, there are several distinct varieties of contract law with their own distinct criteria: the German tradition is characterised by the unique doctrine of abstraction, systems based on the Napoleonic Code are characterised by their systematic distinction between different types of contracts, and Roman-Dutch law is largely based on the writings of renaissance era Dutch jurists and case law applying general principles of Roman law prior to the Netherlands' adoption of the Napoleonic Code. The majority of Southern Africa uses a mixed law system under which private law, including contract law, is largely drawn from Roman-Dutch law while public law is drawn from English common law, while several former British colonies which were previously French apply a system in which private law is drawn from the French legal tradition.

The UNIDROIT Principles of International Commercial Contracts, published in 2016, aim to provide a general harmonised framework for international contracts independent of the divergences between national laws as well as a statement of common contractual principles for arbitrators and judges to apply where national laws are lacking. Notably, the Principles reject the doctrine of consideration, under the grounds that the elimination of the doctrine "can only bring about greater certainty and reduce litigation" in international trade.[4] The principles also reject the abstraction principle integral to German law on the grounds that it and similar doctrines are "not easily compatible with modern business perceptions and practice".[4]

Contract law can be contrasted with tort law (also referred to in some but not all civil and mixed jurisdictions as the law of delicts), the other major area of the law of obligations. While tort law generally deals with private duties and obligations that exist by operation of law and provide remedies for civil wrongs committed between individuals not in a pre-existing legal relationship, contract law provides for the creation and enforcement of duties and obligations created by a prior agreement between parties. The emergence of quasi-contracts, quasi-torts, and quasi-delicts renders the boundary between tort and contract law somewhat uncertain. Other areas of the law of obligations which are occasionally treated as separate from both contract and tort law include the law of unjust enrichment.[5]


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