Consideration: Both Parties Must Provide Something of Value

Essay

Consideration: Both parties must provide something of value.3) Legal capacity: Both parties must have the ability to understand the nature of the agreement.4) Legal purpose: The courts will not enforce a contract that has an illegal purpose.In addition to these characteristics, certain types of contracts, such as those that will take more than a year to complete or those involving the sale of goods worth more than $500, must be in writing.A breach of contract occurs if one of the parties does not live up to the terms of the agreement. When one party breaches a contract, the other party can sue in a civil court. If the court agrees that a party breached the contract, it orders some type of remedy. The most common remedy is compensatory damages, or money the party who breached the contract must pay to the injured party to compensate for the actual harm suffered. In cases where the contract calls for the sale of a unique good, the courts may apply a remedy known as specific performance, which requires the party who breached the contract to do exactly what the contract says. Finally, the courts may issue injunctions (court orders) that prevent the party who breached the contract from taking some action.