Contract Law

 

Making, Breaking and Litigating Contracts

Whether you need to create a contract, have questions about a contract you have or are considering signing, want to get out of a contract you have made, or need to pursue another party who you feel has broken a contract made with you, you should always consult with an attorney first.

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.” 

These are questions that may be important to ask about a contract.

  1. 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.
  2. 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.
  3. What promised action(s) is (are) the subject of the contract?
  4. Was the promise actually offered, or only mentioned as an intention?
  5. Was the promise accepted?
  6. 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 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 into the original contract. Or it may be in the interest of one party, or both, to settle out of court.

What contracts do and do not say can make all the difference.

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

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, when a communication does not state in specific words what is intended

Liquidated Damages - certain or capable of being made certain as to amount or 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

 

For a Maine Attorney Familiar with Contract Law

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This is for general information only. It is not intended as legal advice.