The contract philosophy encompasses two broad groups of projects. A sentence that focuses on the first part of this entry refers to the basic structure and normative justification of contract law. The aim is to subsume an exceptional body of contract law rules under general principles in order to clarify the conceptual categories of contract law, to distinguish it from other areas of law and to specify relevant criteria for its normative assessment. This type of philosophical work presupposes a detailed knowledge of the law in existing legal systems, and the entry begins with the broad outlines of customary treaty law. In general, it is not necessary for a contract to exist in writing. While the Fraud Act requires certain types of contracts to be in writing, New Mexico recognizes and enforces oral contracts in certain situations where the Fraud Act does not apply. In India, electronic contracts are governed by the Indian Contract Act (1872), which requires certain conditions to be met when formulating a valid contact. Some articles of the Information Technology Act (2000) also provide for the validity of online contracts. [20] Moreover, the intentions of a contractual promisor are based not only on his own interest in the draft joint contract or even on the interest of his promisor in this project (as she understands it), but rather on his point of view on the project, since it is in this perspective that he will decide to insist on his performance or to release it.
In this way, the promisor recognizes his promisor as an authority over him with regard to the promised contractual performance. He treats as his final end not only the joint activities described in his contracts, but also his person – his will (which may insist on the obligation to perform or relieve them). Following Kant, one could even say that a contract is «an act of united choice of two persons» (The Metaphysics of Morality 6:271), so that offers and assumptions «are not presented as successive, but […] on the basis of one common will» (6:273). From this point of view, each contract creates a common perspective on the performance considered. Legal issues related to contracts most often arise when a party does not comply with the legal obligation to which it has consented. If one party breaks a contract by failing to perform it, the other party can often bring an action for monetary damages or, in some limited cases, ask the court to force the other party to work as promised. In the United States, an unusual type of unenforceable contract is a personal employment contract to work as a spy or secret agent. Indeed, the secrecy of the contract is a condition of the contract (to maintain plausible deniability). If the spy later sues the government over issues such as salary or benefits, the spy has broken the contract by revealing its existence.
It is therefore unenforceable for this reason, as is the public policy of maintaining national security (since a disgruntled agent could attempt to expose all the secrets of the government at trial). [119] Other types of unenforceable employment contracts include contracts that agree to work for less than minimum wage and loss of entitlement to workers` compensation in cases where workers` compensation is due. Generally, contracts are oral or written, but written contracts have generally been preferred in common law legal systems; [46] In 1677, England adopted the Fraud Statute, which influenced a similar Fraud Statute[47] in the United States and other countries such as Australia. [48] In general, the Uniform Commercial Code, as adopted in the United States, requires a written contract for the sale of tangible products over $500, and real estate contracts must be drafted. If the contract is not legally required to be drafted, an oral contract is valid and therefore legally binding. [49] The UK has since replaced the original Fraud Act, but for various circumstances such as land (through the Property Law Act 1925), written contracts are still required. A second doctrinal challenge of the theory lies in the acceptance – and obvious encouragement – of the law of «effective violation.» As already mentioned, the standard remedy justifies breach of contract, compensation for expectations, contractual rights through substitution relief: it grants disappointed promises a cash surcharge of an amount of their performance value. The «specific service» remedy – a court order ordering the promise to do what it promised – would enforce the obligation to perform more directly. However, the specific service is not the main or usual remedy. In addition, waiting compensation – in fact, and perhaps intentionally – encourages contractual promisors to violate if the cost of performance (including the opportunity cost of redirecting the service to higher-value third parties) exceeds the value of the promisor`s performance. If S promises to sell a widget for $10 to B, who values the widget at $15, and C offers to buy the same widget from S for $16, then the wait aid prompts S to sell to C, pay B $5 in expected damages, and pocket the extra dollar.
The violation is effective in that the widget ends up in the hands of the party who appreciates it most, and this effectiveness is cited (both in legal theory and by the courts) as a reason to refuse a particular performance (N. Ind. Bar. Serv. Co.c. Carbon County Coal (1986)). On the other hand, morality does not give the same flexibility to the promisors. This has dismayed some theorists who are attracted to a treatise as a promise (Friedmann 1989). Others deny the existence of a fundamental conflict and reinterpret the expected recourse versus an implicit promise in the alternative that gives the promiser the choice to negotiate a good for its price or to transfer money equal to the commercial value of the promisor (Markovits & Schwartz 2011). Demanding parties have good reasons to make contractual promises in this way, as it maximizes their profits from trade. But undemanding parties may think that contracts require simple performance and consider the legal possibility of replacing damages for performance to be immoral.
Finally, a modern concern that has developed in contract law is the increasing use of a special type of contract known as «membership contracts» or model contracts. This type of contract may be advantageous to some parties because in one case, the strong party has the ability to impose the terms of the contract on a weaker party. Examples include mortgage contracts, leases, online purchase or registration contracts, etc.
