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A contract is a legally binding document between at least two parties that defines and regulates the rights and obligations of the parties to an agreement.  A contract is legally enforceable because it meets the requirements and approval of the law. A contract usually involves the exchange of goods, services, money or the promise of one of them. “Breach of contract” means that the law must grant the injured party access to remedies such as damages or cancellation.  In 1972, the publication of John Rawls` highly influential A Theory of Justice brought moral and political philosophy back from a long pause in philosophical reflection. Rawls` theory is based on a Kantian understanding of people and their abilities. For Rawls, as for Kant, individuals have the ability to argue from a universal point of view, which in turn means that they have the special moral capacity to judge principles from an impartial point of view. In A Theory of Justice, Rawls argues that the moral and political point of view is discovered by impartiality. (It is important to note that this view, described in A Theory of Justice, was considerably revised by Rawls and called his later view “political liberalism.”) He invokes this point of view (the general point of view that Thomas Nagel describes as “the point of view of nothing”) by imagining people in a hypothetical situation, the original position characterized by the epistemological limitation of the veil of ignorance. Rawls` original position is his very abstract version of the state of nature. This is the position from which we can discover the essence of justice and what it requires of us as individuals and the social institutions through which we will live together in cooperation. In the original position, behind the veil of ignorance, one is deprived of any knowledge of one`s situation, such as gender, race, certain talents or disabilities, age, social status, the particular idea of what constitutes a good life, or the particular state of the society in which one lives.
It is also believed that individuals are rational and disinterested in the well-being of the other. These are the conditions under which, according to Rawls, one can choose principles for a just society, which are themselves chosen from starting conditions that are inherently fair. Since no one has the special knowledge that he or she could use to develop principles that favor their own particular circumstances, in other words, knowledge that causes and perpetuates prejudice, the principles chosen from such a perspective are necessarily right. For example, if one does not know whether one is a woman or a man in the society for which one must choose the fundamental principles of justice, from the point of view of self-interested rationality, it makes no sense to support a principle that favors one gender at the expense of another, because once the veil of ignorance is lifted, we could end up on the losing side of such a principle. Therefore, Rawls describes his theory as “justice as equity.” Because the conditions under which the principles of justice are discovered are fundamentally just, justice proceeds out of equity. Rousseau`s theories of the social contract together form a unique and coherent vision of our moral and political situation. We are inherently endowed with freedom and equality, but our nature has been corrupted by our contingent social history. However, we can overcome this corruption by invoking our free will to reconstitute ourselves politically, according to strongly democratic principles, which is good for us both individually and collectively. When a dispute arises about a contract and informal attempts at settlement fail, the most common method of resolving contractual disputes and performing contracts through litigation and the court system is. If the amount in question is less than a certain dollar value (typically $3,000 to $7,500 depending on the state), the parties may be able to use a “small claims” court to resolve the issue. Not all agreements are necessarily contractual, as it must be assumed that the parties generally intend to be legally bound.
A so-called gentlemen`s agreement is an agreement that is not legally enforceable and should only be “binding in honor.”    Contracts are generally governed by the laws of the State in which the agreement was entered into and are performed. Depending on the subject matter of the contract (i.e. the sale of property, the rental of immovable property), a contract may be subject to one of two types of State law. The majority of contracts (i.e. employment contracts, leases, general trade agreements) are controlled by customary state law – a tradition-based but ever-changing body of laws promulgated primarily by judges from court decisions over the years. A person who is not a party to the contract (a “third party”) may perform a contract as such if: The terms may be implied by the actual circumstances or conduct of the parties. In BP Refinery (Westernport) Pty Ltd v. Shire of Hastings, the British Privy Council proposed a five-step test on behalf of Australia to determine situations in which the facts of a case may involve conditions. The classic tests were the “Business Efficacy Test” and the “Officious Bystander Test”. The “Business Efficacy Test”, first proposed in The Moorcock , involves the minimum conditions necessary to ensure the commercial viability of the contract. According to the official witness test (named Southern foundries (1926) Ltd v Shirlaw , but in fact of Reigate v. Union Manufacturing Co (Ramsbottom) Ltd ), a clause can only be implied if an “official bystander” listening to the contract negotiations suggests that the clause should be included if the parties immediately agree.
The difference between these tests is debatable. .