Contracts are binding promises that oblige involved parties to fulfill their pledges and satisfy the contractual terms. a party that breaches the terms of a contract is liable for the damages caused. The contractual laws obligate such a party to pay for the damages that the other party suffered. However, in certain situations, a breach of contractual terms does not hold the party that caused the damage liable. Thus, acceptance of the offer differs from the initial terms of the agreement; agreeing to participate in illegal activities and proving false information during contract formation does not hold the party that breaches the contract liable.
One of the circumstances that make a party not liable upon breaching a contract is when the acceptance of the offer differs from the initial terms of the agreement. One of the terms of a bilateral contract is that the offer must be similar to the acceptance. As such, a party accepting an agreement should not change the initial offer (Lookofsky, 2022). On the same token, the party making an offer should also not make any changes when forming an agreement with the offeree. As such, binding contracts have legal duties that involved parties must execute to fulfill the requirements of a contract. A party is not liable for the damages incurred if the offeree or someone making an offer chance the contractual terms. In such a scenario, the contract would be void and cannot be enforceable.
Besides, a party can not be held liable for preaching a contract when the contract terms involve engaging in illegal activities. Contracts operate under common laws that highlight a broad range of activities, which applies and do not apply to enforceable promises. Contracts that violate the common law or the uniform commercial code are not enforceable or binding. As such, illegal activities are not enforceable or binding (Vélez-Torres et al., 2022). A party that breaches a contract formed to participate in illegal activities cannot be held liable for the damages caused. For instance, when a business pays a freight company to supply cocaine, an illegal drug, and the offeree declines to supply the intended products, the company that gave such an offer cannot sue the offeree due to the illegal nature of the contract. Hence, apart cannot be held liable for breaching a contract involving illegal activities.
More so, a party can be exempted from being sued for breaching a binding contract when both or one of the parties acted in bad faith. The ethical consideration of any binding contract is that the parties involved should provide truthful information on the obligations that each party needs to fulfill. As such, when one party provides false information during contract formation, the breach of terms by a party cannot attract legal liability (Apaydin, 2019; Davies, 2019). For instance, when a merchandiser paints a silver bracelet with gold and sells the product at a gold price to customers who pay half price and decline to settle the balance after discovering that the item is made from silver, the offerees are not held liable for breaching the contract. Hence, concealing vital information from the offeree renders the contract voidable.
In conclusion, certain exceptional cases do not hold a party liable for breaching a contract. In most instances, a breach of a contract holds the party involved in the breach liable. However, certain breach of a contract that results in damages does not make a party that caused the damage liable. Firstly, acceptance of the offer differs from the agreement’s initial terms, invalidating the contract but not holding the party involved in the breach liable. Besides, a party can not be held liable for preaching a contract when the contract terms involve engaging in illegal activities. Lastly, a party can be exempted from being sued for breaching a binding contract when both or one of the parties acted in bad faith.
Apaydin, E. (2019). The principle of good faith in contracts. Under the International Uniform Laws Cisg, Unidroit Principles and Principles of European Contract Law.–2019. https://www.academia.edu/download/58243681/master_tezim.pdf
Davies, P. S. (2019). The Basis of Contractual Duties of Good Faith. The Journal of Commonwealth Law, 1. https://www.journalofcommonwealthlaw.org/article/8784.pdf
Lookofsky, J. (2022). Convention on contracts for the international sale of goods (CISG). Convention on Contracts for the International Sale of Goods (CISG), 1–256. https://www.torrossa.com/gs/resourceProxy?an=5392149&publisher=FZR504
Vélez-Torres, I., Gough, K., Larrea-Mejía, J., Piccolino, G., & Ruette-Orihuela, K. (2022). “Fests of vests”: The politics of participation in neoliberal peacebuilding in Colombia. Antipode, 54(2), 586–607. https://onlinelibrary.wiley.com/doi/abs/10.1111/anti.12785