What is Contract Law?

Understanding contracts and possible remedies for breach

By Super Lawyers staff | Reviewed by Canaan Suitt, J.D. | Last updated on February 1, 2023

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Contracts are present in every area of our lives, from buying a house to buying coffee. At their core, contracts are just fancy promises that we count on each other to follow through with. The law provides incentives beyond good interpersonal relationships by creating a system of punishments for failing to keep up your end of a contract.

To create a valid contract, the document will need to meet a few basic requirements. Once you’ve done that, the law can help you recover if your counterpart doesn’t follow through with the written agreement. In order to do both of those things, you might find it helpful to seek the advice of a lawyer. The following overview will give you a look at contract basics and a few possible remedies for breach so you feel comfortable speaking with a lawyer.


A contract is a binding agreement between parties that creates mutual obligations or promises that the law will enforce. Many of the details of contract law, including available remedies and how to determine whether there has been enough performance, are governed by state common law. That said, every contract, regardless of jurisdiction, must have the same basic elements of a contract.

Mutual Assent

Mutual assent is sometimes described as a “meeting of the minds.” Mutual assent is expressed through a process of valid offer and acceptance between the parties. An offer is a promise made (by the offeror) in exchange for performance by the other party (the offeree). In bilateral contracts, the terms of the offer are accepted by a return promise; in unilateral contracts, the offer is accepted by the offeree’s direct performance. Alternatively, the offeree may make a counteroffer, which the original offeror must then agree to. If both parties arrive at a mutual agreement, it means they intend to enter into contractual obligations with one another.

An important precondition in the law of contracts is that both parties have the legal capacity to enter a contractual agreement. For example, if one of the parties is a minor (under 18 years of age), they are considered to lack legal capacity. Similarly, individuals with a medical diagnosis of dementia may lack legal capacity, as they cannot understand the specific terms of the agreement or the consequences of entering the agreement. If undue influence or coercion was involved in creating or signing the contract, capacity was lacking.


Consideration is required in every contract and is basically what each person gets in exchange for the agreement. Consideration is usually an agreement to do something you are not legally obligated to do or an agreement to refrain from doing something you have the legal right to do. As an example, if your uncle promises you $1 million if you stop doing illegal drugs, you do not have a contract because you do not have a legal right to use illicit drugs. However, if you hit your neighbor’s car and they agree not to sue you if you pay to repair the car, you likely have a contract because your neighbor has the legal right to sue you.

Even when consideration seems disproportionate (someone sold you their old wedding dress for $50), courts rarely pass judgment on the level of consideration. Generally, as long as parties are not contracting to do anything illegal, unconscionable, or otherwise against public policy, courts are likely to accept the terms of the contract.


The legal remedy for breach of contract is usually damages. There are a number of possible types of damages, including:

Compensatory Damages

These damages are not punitive, but rather seek to make the non-breaching party whole. A party who is awarded these damages will be compensated for losses they suffered because of the breach. For example, suppose you agreed to sell 10 yards of cloth to a seamstress for $20 per yard. But then you failed to deliver the cloth, resulting in the seamstress buying from someone else for $30 a yard. The seamstress can claim $100 in damages.

Punitive Damages

These damages exist to punish breaches in an effort to deter them. They are rare in contract cases unless there has been fraud.

Specific Performance

In some cases, courts will order specific performance of a contract to remedy a breach. In these cases, the breaching party will be forced to complete their end of the contract by doing what they agreed to.

Common Questions

Below are some common questions you might want to consider when meeting with an attorney and getting legal advice for the first time.

  1. How do I create an enforceable contract?
  2. Under my state’s statute of frauds, do I need a written contract or is an oral contract sufficient?
  3. What is an implied contract?
  4. What do I do if someone breached part of the contract with me?
  5. Do I have any defenses for breaching the contract?
  6. What is the legal capacity to contract?
  7. Is arbitration or mediation an alternative to a lawsuit?

Finding the Right Attorney for Your Needs

It is important to approach the right type of attorney—someone who can help you through your entire case. To do so, you can visit the Super Lawyers directory, and use the search box to find a lawyer based on your legal issue or location.

To help you get started, you may want to consider looking for a lawyer who practices contract law.

Why Should I Talk to a Lawyer?

A lawyer can help you make sure you are writing a legally enforceable contract, and then your lawyer can help you enforce it. Your lawyer can review your agreement to make sure it’s legal and contains all the elements it needs in the event you need a court to enforce it later. They can also help you negotiate the terms of more complex contracts to help you get what you’re looking for. If you or the other party breaches the contract, a lawyer can help you navigate the legal system and negotiate a settlement.

A lawyer will be able to anticipate potential problems with your case and advise you on how to approach them. Your lawyer will also keep track of deadlines and file all the paperwork with the necessary courts and agencies, giving you one less thing to worry about.

What do I do next?

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