Although the requirements for formation and termination of a contract, as well as the remedies for breaching a contract, may vary by jurisdictions, contract law is the area of the law in all jurisdictions that governs formation, termination and breach of contracts. A contract is generally defined as a legal agreement between two or more parties. It usually requires an offer, an acceptance of the offer, and consideration in order to be legally binding.
Who may legally enter into a contract is one question answered by contract law. As a rule, minors may not legally enter into a contract. A person who lacks the appropriate mental state of mind is also prohibited from entering into a contract. In many jurisdictions, this area of law makes a contract voidable if a person who lacks the legal capacity to enter into the contract is a party to the contract. A voidable contract may be voided by the person who lacks capacity; however, the other party to the contract is legally obligated under the contract unless and until the other party chooses to void the contract.
The elements required to form and terminate a contract are also addressed under contract law. What constitutes an offer, an acceptance, and consideration are determined by the laws in the jurisdiction where the contract was formed. What may be the subject will also be governed by this type of law. For example, in many jurisdictions, a contract that calls for something illegal to be be done, or something that is impossible, may be considered void, and, therefore, not a legal contract at all. Termination of a contract must also be accomplished pursuant to the rules of contract law in the jurisdiction where the contract was executed as a rule.
In many jurisdictions, by far the largest portion of the jurisprudence on contract law is devoted to issues surrounding breach of contract. When one party does not perform according to the terms of a contract, he or she is said to be in breach of contract. Under what circumstances a party may breach the terms of a contract are governed by contract law. Also within the area of breach of contract, contract law will determine what damages are available to a person who has suffered injuries as the result of another party's breach. In most cases, damages will be in the form of monetary compensation; however, in some cases, a court may order specific performance which requires the party who breached the contract to actually fulfill his or her part of the contract.