Frequently Asked Questions

What is the focus of American contract law and how does it relate to the enforcement of contracts?

The focus of American contract law is to enforce contracts in situations where enforcement is the most equitable course of action. This is derived from the common law and equity court system which Great Britain passed on to America. However, it's important to note that the courts generally modify contracts if enforcement will be too harsh on one of the parties. This is in line with the objective theory of contracts, which states that contracts can only be enforced if a reasonable observer during the contractual negotiations believes in the fairness of the terms of the agreement. This theory is a vital aspect of contract law as it provides a benchmark against which a court that is entertaining a contract lawsuit can compare the clauses in the agreement. In terms of enforcement, courts divide contracts into two categories: valid and invalid contracts. Invalid contracts are void, while valid contracts can be either enforceable or unenforceable. The enforcement of contracts is crucial as it provides legal backing for agreements between contracting parties, making it possible to seek legal redress where a party breaches the terms of the contract. It also makes all parties to a mutually binding contract responsible for keeping their obligations to the agreement, thereby protecting the interests of the contracting parties.