Читать книгу Canadian Business Contracts Handbook - Nishan Swais - Страница 38

We said in Chapter 1 that a contract is a legally binding agreement, but what does a contract do? Just as there are three components of a contract — namely offer, acceptance, and consideration — it can be said that there are three components of a contractual relationship:

• Performance: Doing what the contract says to do.

• Privity: The legal principle that only those who agree to bind themselves to perform a contract are, in fact, bound to perform it.

• Breach: The failure to perform a contractual obligation to which you are bound.

Together, these three components determine what a contract does. A contract establishes the respective rights and obligations of the persons contracting, allocates risk among them, and provides a legal basis for compensation.