What is a contract?
A contract is a legally binding agreement in which property‚ goods or services are provided in exchange for something of value‚ such as money. Some common types of contracts into which an individual might enter include:
- A purchase agreement for a home;
- A sales contract or “installment purchase plan” for an automobile‚ appliance‚ or other major purchase‚ including catalogue purchases;
- A lease;
- Door-to-door sales agreements;
- An authorization to perform home repairs or services;
- A mortgage or personal loan;
- An employment contract.
Contracts are not always written agreements. A verbal agreement may be an enforceable contract. A simple promise, however, is not usually a contract. Many of our day-to-day transactions actually involve a contractual relationship. Certain contracts may be required to be in writing. For example, contracts for the sale of real estate are usually required to be in writing.
Contracts are usually legally binding. Be sure you understand exactly to what you are agreeing. If you have questions, see your lawyer before you sign. If you agree to something which is not in your interest, an attorney may not be able to undo the damage.
Can I get out of a contract?
In some cases‚ yes. Certain types of consumer sales contracts must have provisions allowing you to cancel within a specified period of time. If a contract is not legally executed‚ it may be possible to have it invalidated. Some circumstances that may lead to the cancellation of a contract include fraud‚ misrepresentation‚ or coercion.
Simply changing your mind or deciding you cannot afford that for which you contracted however‚ is generally not a sufficient reason to release you from a contract. If you break a valid contract‚ the other party may be able to sue you and be awarded damages.
