Five main principles of Contract Law: Offer and acceptance, consideration, intention to create legal relations, capacity, and legality.
Consideration contract law involves the mutual exchange of value between parties, such as money, goods, services, or promises, in order to make the contract legally enforceable..
From an economic perspective, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of information asymmetry.
Because of its connections with both agency and incentives, contract theory is often categorized within a field known as law and economics..
The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.
In some states, elements of consideration can be satisfied by a valid substitute..
The five best known theories or principles of contractual obligation-the will theory, the reliance the- ory, the fairness theory, the efficiency theory and the bargain theory- each have very basic shortcomings..
The competing major contract theories of contract that will be considered include (1) contract as an exchange of promises; (2) contract as an agreement in fact; (3) contract as based upon the reasonable expectations or reliance of the parties (consequentialism); (4) contract as based upon the assumption by the parties .
This chapter reviews the three main theories of contract and contract law, namely promissory, reliance, and economic theories..
The contractual theory views the corporation as founded in private contract, where the role of the state is limited to enforcing contracts.
In this regard, a state charter merely recognizes the existence of a "nexus of contracts" called a corporation..
The classical model of contract law stated that for a contract to come into existence some specific elements must be present; intention to create legal relations, an offer followed by a matching acceptance, the presence of consideration, privity between the parties and certainty of the terms..
Contract law theory raises issues concerning the relation between law and morality, the role and the importance of rights, the connection between justice and economics, and the distinction between private and public law..
