Question

What does the sanctity of contract mean? What significance, if any, does the concept hold in the business community?

1 pg please single spaced.THANKS!

Answer 1

Sanctity Of Contract is a general idea that they must respect their obligations under that contract once the parties have formally entered into a contract. While effective breach theory is that parties should feel free to infringe a contract and pay damages, as long as this result is more cost-effective than performing under the contract. For the business community, the principle of contract sanctity is important as it promotes the use of contracts as a tool for protecting their resources. No contract is formed where a corresponding proposal and acceptance is not made by the parties.

Consequently, certain cases where the sanctity of contracts has led to further legal action in the business community are typical contract violations and contract breaches. The right to void the contract could be given to the adversely affected party in the process of contract formation which is short of breaching the contract. The value of a party's duties when entering into a contract lies at the root of these forms of common contract errors.