Rights and Obligations

When the performance of contractual obligations commences the parties must begin doing what they are meant to do as per the proper interpretation of the terms. During performance, if there is a change in circumstances or needs, they can either re-negotiate deliberately or just carry on and accept a change in practice.

 

Either way the proper interpretation of formal rights and obligations is affected. If there is a dispute a court will interpret the contract principally by what the parties intended at first, and subject to any proven changes in their intentions.

 

It is compulsory to perform every obligation imposed by the contract, and to continue performing until it is complete. That applies even if the advantages to the parties are unequal, and even if the contract is unfair. A contract operates like a set of laws agreed upon by the parties and will be upheld by a court. There are exceptions, however, which we address under Vitiating Factors, below.

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If a party fails in performing a major term of the contract, then the contract may be terminated and a suit for restitution, damages and so forth may ensue.  If they fail in performing a minor term, then a suit for damages only is an option to pursue. However, if non-performance or altered performance is accepted by the counter-party, or if it appears so, then over time with repeated acceptance, a court would deem the terms of contract have been altered, as implied by conduct. More detail on these issues is to be found elsewhere in this chapter.