What is the Definition of a Contract in California?

A contract is an agreement that is given the full force and weight of the law. Contracts essentially create private law. Parties may negotiate and agree to a deal and will both be bound by the terms of the agreement. Contracts are essential to doing business and there are clear laws in place designed to establish the rights and the responsibilities of parties to a contractual agreement. 

It is important to understand the definition of a contract in California because signing a contract vests you with certain rights and imposes certain responsibilities upon you. If you enter into a contract and you do not abide by the terms of the agreement, a lawsuit may be filed against you and consequences can result. If a party contracts with you and does not live up to the terms of the agreement, you also have the opportunity to use the legal system to seek a remedy.

The experienced California contract lawyers at Brown & Charbonneau, LLP can provide assistance with the negotiation of contracts, can review contracts before you sign them to advise you of your rights, and can help you to enforce a contract in the event of a breach.

What is the Definition of a Contract in California?

A contract is not created every time parties agree to do something. There are certain conditions that must be fulfilled for an agreement to constitute a legally binding contract.  For example, in order for an agreement to meet the definition of a contract in California and to have legal weight:

• There must be a meeting of the minds. The parties must intend to enter into a contract and must both have the same understanding of the terms of the agreement.  Under common law rules, the mirror image rule applied, and a contract was created only if both parties had the same agreement agreement terms. Under the Uniform Commercial Code, however, there is somewhat more flexibility and a contract can be created even if both parties have a slightly different understanding of terms.
• There must be an offer and acceptance. One party must make an offer to enter into the agreement and the other party must accept the terms of the offer.  The contract can contain mutual promises (for example, party A promises to paint a house and party B promises to pay) or it may be a unilateral contract in which an offer can be accepted only by performance (for example, party A promises to pay party B if party B paints. Party B may accept the offer to pay only by actually painting, not by promising to paint).
• There must be consideration. Something of value must be exchanged.   If Party A promises to pay Party B $10, but Party B does not make any return promise or offer anything of value in exchange, then no contract is created. This is a promise, not a contract.

These are just a few of the basic components of a contract. To get more information on the definition of a contract in California and for assistance negotiating and creating a legally valid contract, call Brown & Charbonneau, LLP today to speak with our expert contract lawyers who can help you.

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