Nature of Contract

The nature of contracts is various which can be explained in many ways. The agreement that can be applied by law is called a contract. While analyzing its nature, the essential elements scope, and, merits of contracts come by themselves. Contract creates liabilities between parties which they need to perform and bear. The nature of contracts has been mentioned below:

1. The Nature of the Contract is Civil

The nature of the contract is civil and mainly it is related to real estate/property and post of the individual. It creates rights, duties, and liabilities between the parties. The terms and conditions mentioned in the contract need to be followed accurately.

While performing the contract if the problem emerges, the party feeling harm can go to court, he can claim compensation or fine and he can file a suit in the court to the other party. There is no issue of physical punishment in this condition as it has a civil nature.

2. The nature of the Contract is Social and Professional

Indeed, the nature of a contract is social and professional. Some of the contracts are made for social activities and most of the contracts are under professional and business communities. Court marriage is the social context contract and buying and selling contract gives under
a business field.

3. Nature of the Contract is Autonomous

An individual is free to do or not to do anything yet his freedom is under the limitation of prevailing law and he can use it accordingly. To have the freedom to make a contract is the nature of a contract. Generally, nobody can compel others to sign a contract. To prepare and choose the terms and conditions of the contract the parties are free; the consideration of the contract, its procedure of remedy, and compensation, etc. on these issues the contracting parties can offer terms and conditions. Nobody can create hurdle or manipulate him. As parties are free to do or not to do things in the contract which signifies the nature of the contract.

4. Nature of Contract is Facilitator

Contract law does not prevent the individual from signing the contract. Yet there are its own measures for making contracts. There can be a contract between parties in accordance with prevailing law. This is a facility. Therefore, the nature of the contract is a facilitator. To sign a contract with an individual or corporate agency, the terms and conditions can be set up favoring one party. To develop the social and business sectors, the role of contract is helpful. Had there not been the concept of contract, society would not be so dynamic that there would be rapid modern development. There would be no development in the business community but there would be obstacles to block the path of development. Therefore to progress social and business sectors and offer facility contracts is important. Thus, its role is not unhelpful but facilitating and helpful.

Also, Read Essential Elements of Contracts

5. Nature of Contract is Limited/Contract has Limited Nature

The contracting parties can prescribe the terms and references to favor only one party or themselves. The contract is obligatory only for those who sign it. They don’t allow liability to the third party. The form and nature of the contract are individual. On the other hand, it cannot be transferred to another individual. Those individuals who are not involved in making the sign cannot claim both liability and rights of the contract. Yet, there are some exceptions. Sometimes contract is transferable in a particular situation and time which can establish the liability and rights of the third party. The considerable thing is that personal contracts cannot be transferred. Similarly third party cannot claim the rights of contract in all situations. Above all, the nature of contract is limited and is like of person’s habit.

6. Nature of Contract is Related to Promise and Obligation

Contract originates from promise. Promise creates agreement which ultimately turns out to be the contract. The contract finally leads to the obligation which involves the rights duty and liability of the parties involved in the contract. It is crystal clear that the nature of the contract is related with rights and duties that have legal binding. To execute legal right the contract shall have followed the law. This is how the nature of a contract goes with promise and duty.

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