Basics of Contract Law (Part Three)

This past Thursday we discussed common remedies for breach of contract for part two of a three-part series of discussions about the basics of contract law. For part three, today we are discussing some common sections of a contract.

Common Sections of a Contract

To begin, all contracts have at least a few of the following sections, which can vary in detail, length, and format depending on the complexity and purpose of the contract.

Contract Frame

The contract frame includes formal language, such as the name of the parties at the beginning, background or recitals portions, and, at the end of the contract, signature blocks.

Definitions

The definitions section includes defined terms, which usually include terms that are repeated throughout the contract that have the same meaning.

Rights and Obligations

The rights and obligations section includes the rights and responsibilities of each party to the contract, which the parties have a legal duty to perform. These include obligations such as performing a service, making a payment, and various other promises.

Termination

The termination section specifies how and when the agreement can be terminated by either party or upon a specific event and under what circumstances.

General Provisions

The general provisions section includes the effective date of the contract, whether the contract can be executed in multiple counterparts, whether it can be amended, and whether the contract constitutes the entire agreement of the parties and supersedes all prior written or oral agreements.

These are a few common sections of a contract. Because not all contracts are created equal and vary in purpose, it is best to consult a licensed attorney in your jurisdiction if you have any questions about how to draft a contract or if you have any other contract law related questions.

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