Contract basics- an exchange

30 06 2008

While we are all subject to the laws of our city, state, and country, contracts are kind of like laws that two or more people have agreed to create to govern their relationship. You only have to follow the rules if you choose to enter the contract, but then you are bound by law.

More specifically, a contract is an exchange of one or more promises. So it is a promise, but it is also an exchange. For example, a photographer promises to take a photo and let a client use it, and in exchange, the client promises to pay the photographer a certain price.

Seems obvious, but it does have implications. If there is no exchange, there is no contract. If the promise was not voluntary there is no contract (this gets you off the hook if a gun is held to your head, but doesn’t cover the mere fact that the other party has the upper hand).

A contract also has to have something called consideration, an important term. Consideration is that thing that you are exchanging. Both people have to have traded something for a contract to be in place. Otherwise it is a gift. So if client agrees to pay and photographer agrees to shoot, that is an exchange. If photographer agrees to shoot for free (or client wants to give away some money), there is no contract. A one-sided promise can’t be enforced. The benefit of agreeing to shoot for free, is that if you change your mind, you haven’t really broken a contract (there are some exceptions, but that is for another day). They can’t make you shoot for free. Oh yippee!

This also has implications because consideration has to be something that you weren’t already obligated to do. For example, if you promise to abstain from drinking until you are 21, in exchange for college tuition, you might not actually have an enforceable contract. You already had a legal obligation to abstain from drinking until you are 21. So you have not really given anything up.

What do you mean, “one or more promises?”

A contract can still only consist of one promise because sometimes a contract is accepted at the same time it is created. More on offer and acceptance later, but basically if I offer to pay you if you walk my dog, and you walk my dog, you are accepting my offer (and putting the contract into play) at the same time that you are performing your side of the bargain

So imagine this scenario:

  • You (a photographer) get a call for a last minute assignment.
  • You say you aren’t sure, but you will try to make it.
  • Client says: okay, well if you can go great, if not, fine.
  • You haven’t made a contract yet. If you don’t go, you have not broken the contract.
  • But if you go, you have done two things. You have made a contract and you have performed your part

Let me know if this is interesting, or if I should stick to the Floo Powder posts.




One response

3 08 2008

I agreed with you

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