Is a promise always a promise? Proving breach of contract

March 24, 2013

Is a promise always a promise? Proving breach of contract

Article provided by Mariniello & Mariniello, P.C. Attorneys at Law
Visit us at http://www.mariniellolaw.com

Late last year, Donald Trump offered to give President Obama $5 million if he turned over his college transcripts and passport records. The media industry had a great time poking fun at the famous tycoon, as did well-known comedian Bill Maher. In front of his live audience, Maher offered to give Trump $5 million for proving he was not the offspring of an ape. The Donald subsequently brought a breach of contract lawsuit against Maher, demanding that he pay the promised money.

Whether or not Trump prevails in court, the case raises interesting issues about the basics of contract law.

What constitutes a contract?

Contracts make the world go round. Businesses in New Jersey and throughout the nation would not be able to function without contracts. Not all contracts need to be formally executed and signed documents; they can be oral or written on the side of a cow for that matter.

There are, of course, a myriad of exceptions and rules regarding various types of contracts. For example, certain types of contracts must be in writing -- such as those regarding the transfer of land -- and must be signed by all parties.

In basic terms, a contract is a legally binding agreement made between two or more parties. The parties may be individuals or entities, such as a company or partnership. Each party must be competent and there must be a "meeting of the minds" -- a mutual agreement that an agreement exists.

Consideration -- something given in return for the offer -- is also necessary. Stated another way, something of value must be given in exchange for the promise offered.

Proving a breach

Breaking an agreement or promise, whether or not intentionally, can mean the contract is broken or "breached." In order to prove that a breach has occurred, the aggrieved party to the contract must prove the following:
-An offer was made
-The offer was accepted
-There was consideration

Most importantly, the aggrieved party must show he, she or it suffered harm as a result of the breach. This is where Donald Trump's lawsuit gets interesting. What harm, if any, did he suffer if a contract was actually created by Bill Maher's promise to pay for proof of his parentage? What value did Maher receive in return for Trump's acceptance of the offer?

This humorous anecdote may entertain many people in the coming months but may educate them as well. Contract law can be straightforward, like this lawsuit, but more often, it is convoluted and confusing. If you have a question about contract law, are drafting an agreement or disputing a contract to which you are a party, consult an experienced contract lawyer. An attorney can help you understand the ramifications of completing or withdrawing from an agreement.