Contract
A legally binding agreement between two or more parties that creates obligations each party must fulfill.
A contract is an agreement between two or more parties that the law will enforce. For a contract to be valid, there must be an offer, acceptance, and something of value exchanged (called “consideration”). Contracts can be written or verbal, though some types — like real estate sales and agreements that take more than a year to complete — must be in writing under Minnesota’s statute of frauds.
Contracts are everywhere in daily life: leases, employment agreements, cell phone plans, purchase agreements, and service contracts are all examples. When one party fails to hold up their end of the bargain, the other party can sue for breach of contract and seek damages (money) to cover their losses. Minnesota contract law also allows the court to order specific performance, requiring the breaching party to fulfill their obligation.
Why it matters: Understanding what makes a contract binding helps you protect your interests. Before signing any contract, read it carefully. Once you sign, you are legally obligated to follow its terms, and breaking those obligations can lead to a lawsuit.
Example: A homeowner signs a contract with a roofing company agreeing to pay $8,000 for a new roof. The company installs the roof, but the homeowner refuses to pay. The roofing company sues for breach of contract and recovers the $8,000 plus court costs.
Business agreements, employment agreements, leases, purchases, service agreements