A contract is not only one of the most substantial and basic elements of private law, but also a vital part of our everyday lives, more so than many people might think. You might say: “But I haven’t signed any contracts as of late?” and you would be right, but here’s the catch: contracts go far beyond signing papers in a notary’s office. Ordering a pizza? A contract. Buying that book on Amazon? A contract. Agreeing to let your daughter go out if she tidies up her room first? You guessed it – a contract.
The above are just a few examples of contracts you might encounter in your day to day life. In reality, contracts of all shapes and kinds are everywhere. While the shaping of contract law in the modern sense only started in the late 18th century, the general idea has been known to mankind for millennia. Although ancient Greek civil law wasn’t particularly sophisticated, the categories to cancel agreements described by Plato weren’t too far away from the ones we know today. The ancient Roman contribution into legal history was greater. The Romans named several kinds of contracts based on the nature of the transaction. Although less so than the continental law in Europe, English contract law – and by extension other common law jurisdictions – was influenced especially by Roman thought.
Modern contract law was born in the British Isles, as an effect of the English Industrial Revolution. The intense social and economic developments, together with the ever growing spirit of entrepreneurship, led to the growing amount of relevant court cases. This led to contract law growing organically. From Great Britain it was exported to its colonies and former colonies. The 20th century saw its further development and reforms. Many of those sought to right the wrongs of the past when it came to the bargaining power imbalance between the consumers and corporations, workers and employers, people of color and white people, and so on. Once more, the law was adjusting to the changes in society. Between the horrors of the two World Wars, the cultural and technological revolution, and the rise of civil rights activism, there was a lot to adjust to.
Having dealt with the historical background, it’s time to determine what constitutes a contract. As we have already mentioned, there are various kinds of contracts. They can generally be verbal or written, though some contract types require specific formalities, while in many cases a contract can be formed with no words exchanged. Still, there obviously are some formalities that must be met for a contact to be legally binding. In common law jurisdictions, differently than in the civil law, there are four such elements that are, as a general rule, present in any contract regardless of its kind, form and the amount of money involved. Those are: offer, acceptance, consideration and an intention to be legally bound. To keep this post’s length tolerable, we will follow-up by first describing them broadly and then going into detail in further posts.
