Laws governing contracts vary from state to state. In Maine these laws include the Uniform Commercial Code, which governs a wide variety of contracts between merchants and consumers; and Statutes of Fraud, which governs the types of contracts that must be written to be enforceable. However, there are general points of contractual law besides those written in these statutes that define and determine accountability in contracts of all kinds, from several-page employment contracts to the age-old “word and a handshake.” Questions that need to be asked about any contract include:
- Is it between two parties that may legally enter into a contract? For example, contract made with minors and adults with diminished mental capacities may be void.
- Is it express or implied? In some cases, a verbal “word and handshake” may be sufficient, while an alleged written contract may actually omit required wording to make it an enforceable contract.
- What promised action(s) is (are) the subject of the contract?
- Was the promise actually offered, or only mentioned as an intention?
- Was the promise accepted?
- What is the consideration, or value, that each party extends to the other as terms of the contract?
Contracts may be terminated by mutual agreement. One party may be excused from a contract if unforeseeable events make it impossible to perform. On the other hand, the other party may insist that the terms of the contract may and should be honored, and sue for breach of contract. If that party wins in court, they may be awarded nominal damages, to symbolize that wrong was done, even if the consequences were not significant. Punitive damages, which are intended to punish malicious or willful conduct, are not usually awarded in contract cases. However, the court may order restitution, to restore the aggrieved party to the same economic position as when they entered into the contract; or payment of the cost of remedying a defect. Attorneys’ fees and costs of recovery may be added to the damages or award, but in most cases this provision needs to be written in to the original contract. Or it may be in the interest of one party, or both, to settle out of court.
To put yourself in the most secure position when entering into a contract, consult with an attorney who does Contract or Transactional law. When a contract falls apart, consult with an attorney who handles Transactional law and Civil Litigation.
Related Legal Terms and Definitions
Acceptance – communication of consent to terms of a contract
Breach – the violation of an obligation
Consideration – the cause, motive and/or inducement to enter into a contract
Damages - a remedy granted to one party of a contract for breach of another party to the contract
Discharged – a release from an obligation whether it has been fully or partially completed
Duty to Mitigate - the obligation of one to whom a remedy is due to act so as to not to increase the damage
Excused - a release from an obligation where some performance continues to be required (similar to "discharge")
Express – declared in terms, written or oral
Implied – not express; where a communication does not state in specific words what is intended
Liquidated Damages - certain or capable of being made certain as to amount; a specific sum
Mutual Assent – consent or acceptance by more than one party; group assent
Quasi-Contract – a contract that the law (i.e. a court) creates on its own based on circumstances
Release - relinquishment by one contractual party of an obligation due him by another party or parties
Repudiation – the act of renouncing a duty or obligation
Rescission - the result of parties to a contract mutually agreeing to release each other from performance and obligations
Unjustly Enriched – legal theory creating a right of recovery in one party for performance where no contract exists
Void or Voidable – in contract law, a situation in which a purported contract creates no obligations of the parties
Warranted - justification of an action (usually a remedy) based on the case law, the contract and other evidence
What contracts do and do not say can make all the difference.
To construct, interpret, enforce, or get out of a contract, consult with a Maine Contract Attorney. If litigation is a possibility, make sure the attorney you select litigates.
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