Law of Contracts -I

What Is a Contract?
A contract is a promise between two or more persons involving the exchange ofsome good or service. Some of the basic elements of a contract include: an offer and an acceptance; "capacity," or being of legal age and sound competence; "mutual assent," or agreement on the terms of a contract; and "consideration," or compensation for goods or services rendered. The element that distinguishes a contract from an informal agreements is that it is legally binding:the law provides a remedy in the event that the promise is not fulfilled. Bylaw, certain types of contracts must be in writing, but oral contracts are valid in many situations. An oral contract may be held to exist even in the absence of agreement as to all its terms.

Sources of Contract Law: The Statute of Frauds
The Statute of Frauds was enacted in England in 1677, and it has been adoptedin one form or another by all 50 states. In order to prevent fraud on the part of either party in the exchange of goods, the statute requires a written contract for: one, the sale of land; two, the assumption of the obligations ofanother party, such as the co-signing of a loan; three, transactions that take more than one year to complete; and four, sale of personal property for more than $5,000 (under the Uniform Commercial Code, discussed below, the threshold is $500).

The Uniform Commercial Code
The Uniform Commercial Code (UCC) is the main body of law that governs transactions involving goods. It was developed by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, a nonprofit legal research organization. Since its completion in 1952 it has been adopted byall 50 states (Louisiana, however, did not adopt all of the code). The purpose of the code is to facilitate commerce by simplifying and clarifying the law regarding commercial transactions and to create a uniform set of rules nationwide. The UCC is largely based on common law, which means that it usually adheres to legal guidelines established in court cases. However, in many casesthe UCC is forced to establish codes outside of traditional legal precedentin order to conform to the rapid pace of modern business practices.
In the United States, the UCC governs the sale of tangible, movable goods, property leases such as business equipment, and financial transactions such asbank deposits and letters of credit. The sale of services and real property are not covered by the UCC. International transactions are governed by the United Nations International Sale of Goods Convention, adopted by the United States in 1988, provided the foreign country involved is party to that agreement. Various state and federal statutes regulate contracts for services, consumer credit, the sale of land, and other specialized areas such as employment. Where no relevant statute exists, contracts are evaluated using common law principles. The Restatement of Contracts, created and published by the American Law Institute, summarizes and "restates" common law principles of contract. Although it does not have the force of law, it is heavily relied upon by legal professionals, including judges, who often quote it in written opinions.