In common law jurisdictions, there are four essential elements to the formation of a contract: offer, acceptance, consideration, and intention. The offer made by one party and its acceptance by the other party expresses the two parties “concurrence of wills” or “meeting of the minds”. At common law, the acceptance had to be a mirror image of the offer in order to be binding. In modern usage, an acceptance can be binding as long as there are no material differences.
The intention of the parties to be legally bound is usually presumed in agreements of a commercial nature. At common law, in order to be legally 
binding a contract had to be “met with” consideration  and only a person who had provided consideration could enforce rights under a contract. 
Consideration is a central concept in the contract law theory of common law jurisdictions. It comprises anything of value, usually a sum of money, but can also be an item or service.



In common law jurisdictions there are many types of contracts distinguished according to different criteria. The most familiar among them are:
written and oral (according to the medium used)
express and implied (according to form), 
main and collateral or ancillary (according to function),
preliminary and final.


The validity of a contract can be contested on a number of grounds. 
Illegality of the subject matter automatically renders a contract void. This is also the case with contracts which violate public policy considerations.
Lack of (legal) capacity, fraud in the inducement, and duress render a contract voidable and can be used by a party to escape its obligations under the contract.


In common law jurisdictions, a variety of remedies are available to the injured party in case of a breach of contract.  They fall into 2 categories:
monetary damages (pecuniary compensation)   and non-monetary relief. 
Monetary damages compensate the non-breaching party for the suffered loss or loss of profit, as long as it can be established that the latter loss could have been foreseen by the breaching party at the time of non-performance. 
Non-monetary relief is an equitable remedy and is usually awarded in the form of specific performance or injunction.



Types of breaches:
minor (immaterial) -partial and insignificant breach
material - a significant breach which entitles the non-breaching party to seek damages and to terminate the contract;
anticipatory breach - unequivocal indication that one of the parties will not perform its obligations under a contract (such as a repudiation)



Types of remedies/damages
1. monetary damages - pecuniary damages, damages involving the payment of money to the non-breaching party
2. non-monetary relief - equitable remedies including specific performance and injunction;
3. general damages - compensation for the immaterial dimension of the harm suffered: pain, suffering and loss of amenity (usually available only in cases involving a tort)
4. compensatory damages - compensation seeking to put the non-breaching party in the position that it was before entering the contract;
5. special damages - compensation for quantifiable monetary loss
6. reliance damages - compensation for the loss incurred by a non-breaching party acting in reliance on a contract
7. liquidated damages - stipulated damages, pre-defined compensation usually stipulated in a liquidated damages clause in the contract
8. punitive damages- exemplary damages, pre-defined amount not intended as a compensation but as a deterrent for non-performance (usually available only in cases involving a tort)





The use of the term “bankruptcy” is somewhat twofold both in the UK and US. The fundamental concept of bankruptcy is that it is a way of “dealing with debts that one cannot pay”. 
Therefore, bankruptcy proceedings are seen as an opportunity to: a) discharge one’s self from overwhelming debts and make a fresh start under the restrictions of a repayment scheme; 
and b) make sure that one’s assets are distributed fairly among one’s creditors. The United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies” which were incorporated in the US Bankruptcy Code in 1978 and established the Federal Rules of Bankruptcy Procedure, according to which, voluntary and compulsory liquidation (winding-up) are forms of bankruptcy designed for individuals or corporations. However, when a corporation  files a Chapter 7 (dissolution) bankruptcy, it is dissolved permanently and there is no "fresh start".

 In the UK,  “bankruptcy” is often used to denote the insolvency of an individual and so exists in opposition to liquidation (winding-up) especially in: “bankruptcy petition” as opposed to “winding-up petition” or “bankruptcy order”.