The term “contract” covers a wide array of topics. This legal term is usually used in business law. Contract is generally defined as a “promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some ways recognizes as a duty” (Restatement (Second) of the Law of Contracts § 1). Hence, when a person sues someone for breach of contract, it only means that the defendant fails to fulfill his promise to the plaintiff (Maggs 1). If this happens, there are two options that the court may ask to the defendant – pay the plaintiff or abide with the promise. The consensus theory of contract asserts that the contract “is the product of the consensus or “meeting of the minds” of contracting parties” (Hamburger 241). Hence, when there is no consensus, no contract will be made. This is supported by Mootz (2011), where he claimed that the formation of contracts generally requires the agreement of the two parties’ minds (Mootz 1).
A promise is enforceable by the law if it comprised the two bases to be considered legally recognized – reliance and consideration. Reliance is deemed as “an alternative basis for enforcing promises” (Maggs 13). On the other hand, consideration is defined “for a promise as something – a performance or another promise – given in exchange for the promise as a part of a bargain” (Maggs 13). There are basically four requirements that characterize a cons…
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