ENGLISH FOR LAWYERS: WHAT DOES A CONTRACT DO?
A contract establishes the terms of the parties’ relationship. It reflects their agreement as to the rules that will govern their transaction.
The rules generally include:
➡️the statements of facts that each party made that induced the other to enter the transaction;
➡️each party’s promises as to its future performance;
➡️each party’s rights;
➡️the events that must occur before each party is obligated to perform;
➡️each party’s discretionary authority;
➡️how the contract will end, including the events that constitute breach and the remedies for breach;
and
➡️the general policies that govern the parties’ relationship.
✨These rules are the parties’ private laws, which the courts will enforce, subject to public policy exceptions found in statutes and common law. Indeed, commentators speak of contracts as private law. They also refer to them as planning documents. Unlike litigation, which looks back in time, contracts look forward to the parties’ future relationship and reflect their joint plans.
✨A contract also helps the parties to problem solve. Often parties will have the same goal but differ as to how to resolve a specific business issue.
✨A well-written contract can bridge this difference, giving each party enough of what it needs to agree to the contract.
To be continued!
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