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Delegation of Contractual Duties Contracts create duties as well as rights. A party may promise to pay money, deliver goods, provide services, construct a building, or perform some other obligation. But what happens when the party who originally promised to perform wants someone else to do the work? Contract law generally permits a party to delegate contractual duties in many circumstances. Delegation occurs when one party to a contract transfers the responsibility for performing a Read more

Assignment of Contract Rights Contracts do not always remain between the same parties from beginning to end. A person who has the right to receive money, goods, services, or some other contractual benefit may want to transfer that right to someone else. Contract law generally permits this through an assignment of contract rights. An assignment occurs when one party transfers a contractual right to another person. The person transferring the right is the assignor, while Read more

Time of Performance in Contract Law Time is often one of the most important elements of a contract. A promise to deliver goods, complete construction, make payment, provide services, or close a transaction is rarely meaningful without some understanding of when performance must occur. A contract may state an exact date, establish a period for performance, make time expressly essential, or say nothing about timing at all. When that happens, contract law must determine when Read more

Actual Breach and Failure to Perform in Contract Law A contract creates legal obligations that are generally expected to be performed according to their terms. When the time for performance arrives and one party fails to do what the contract requires, the law may treat that failure as an actual breach of contract. Actual breach is one of the most basic concepts in contract law. It is also the point at which many other doctrines Read more

Consequential Damages and Foreseeability in Contract Law A breach of contract can cause more than the immediate loss of the promised performance. Sometimes the loss is straightforward. A seller fails to deliver goods, and the buyer has to pay more for replacement goods. A contractor performs defective work, and the owner must pay to correct it. But sometimes a breach creates additional losses that extend beyond the immediate transaction. A supplier’s failure to deliver machinery Read more

Reliance Damages and Restitution in Contract Law When a contract is breached, the injured party may suffer a loss in more than one way. Sometimes the loss is the value of the bargain that was never received. That is the territory of expectation damages. But sometimes the more immediate problem is that a person spent money, changed their position, or transferred something because they relied on the agreement. In other situations, one party has already Read more

Expectation Damages in Contract Law When a contract is broken, one of the first questions the law must answer is simple but fundamental: What should the injured party receive as compensation? The most important answer in contract law is the doctrine of expectation damages. Expectation damages are designed to put the injured party in approximately the economic position they would have occupied if the contract had been properly performed. Rather than punishing the breaching party, Read more

Capacity to Contract: Who Can Enter a Binding Contract? Contract law generally assumes that people who make agreements understand what they are doing and have the legal ability to make binding commitments. But that assumption is not always justified. A person may be too young to make certain contracts fully binding. A person may lack sufficient mental capacity to understand the transaction. A person may be so intoxicated that they cannot understand the nature and Read more

Assignment vs. Delegation: What’s the Difference? Contracts are usually made between specific parties. But contractual relationships do not always remain exactly the same throughout their entire existence. A party may want to transfer the right to receive payment to someone else. Another party may want someone else to perform a contractual obligation. A business may sell a contract, transfer receivables, subcontract performance, or reorganize its operations. Contract law therefore recognizes two important mechanisms: The distinction Read more