A contract entails an actionable promise or a number of promises which specifies the conditions under which such promise can be legally binding and thus enforceable. It is important to clarify that in each and every promise two or more parties are involved such as the promisor, the promise and certainly their mutual intention to create a legally binding agreement. A legitimately definition of contract was provided throughout the section 1 of the American Law Institute’s Restatement Second of the Law of Contracts. Specifically, it was denoted that "a contact is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty".
In the beginning of 19th century, an intention alone did not suffice and for a contract to be regarded as lawful, it should be proved that it was made after considering further legal consequences. A simple declaration of intention made in the heat of a moment will not establish a binding promise. An agreement between parties will only be assumed as an enforceable contract if it is in a written form stating that those parties had indeed intended to form a legally enforceable contract. It is important to specify that there are agreements made between specific parties which will not be treated as actual contracts under the precise area of law. Some agreements are just mere arrangements which will never be treated as contracts because of its ordinary nature. The conclusion of the abovementioned is that an intention to create legal relations is the key when it comes to the formation of a contract under Cypriot Law. Such agreements might be named as social or family arrangements, and of determining intention.
A basic principle of the formation of a binding contract is the freedom of choice. The law assumes that the parties enjoy freedom of economic decision when entering into contracts. The concept of freedom of contract is two tailed. For instance, the party has the freedom to choose and enter into a contract by setting any rules it assumes profitable or reject to enter in any kind of agreement. This principle is evident throughout Lord Diplock’s observation that the parties have the advantage to determine which duties or responsibilities they are willing to accept. In other words, if an individual is entered into a relationship without any sign of freedom of choice, then, the contract will likely not be considered binding by the Courts.
The formation of a contract indicates that the contract will be certainly carried out, but if the other party fails to meet its contractual obligations, the injured party will be protected by receiving a compensation. For example, according to contract law, the party who was refused any payment by the other party will be treated into the exact identical way as it would have been treated if the contract was successfully carried out. For the parties’ protection of expectation, any kind of damages occurred from lost performance will undoubtedly be recoverable. This interpretation is accepted and performed in any established legal system. Therefore, any damages suffered by the party which entered into a problematic contract will be compensated and the party who did not act lawfully will suffer losses. This ruling had the initial intention to avoid any reckless behaviours and encourage the parties which enter into transactions become more conscious about the significance of a contract’s construction.
We handle contract law of high importance. Amongst others we handle disputes related to: