Typically, a contract requires an offer, acceptance, and consideration, which the law considers to be something of value. Suppose that Enrique offers to sell his weight set to Sean for $100. Sean accepts Enrique's offer and pays him $100. Here, Enrique is the offeror (the one who makes the offer), and Sean is the offeree (the one to whom an offer is made). The weights and the monetary compensation ($100) are the consideration.
Sometimes, one or both of the parties to an agreement fail to fully perform their obligations. Even if they partially perform those obligations, they can face a lawsuit for breach of contract, or failure to perform to the contract specifications. For example, Allen promises to cut Bryan's lawn for $100. Bryan pays Allen the entire amount, and Allen cuts half of Bryan's lawn. Unless Bryan agreed to accept Allen's partial performance, Bryan can sue Allen for damages resulting from Allen's failure to fully perform.
Once both parties to a contract fully perform their obligations in accordance with the terms of the contract, the contract is completed. At that time, the contracting parties have no more duties or obligations under the contract.Often contracts include provisions in the event of a breach. For example, contracts normally include provisions that set forth the available remedies, or the enforcement of rights, if one or both parties fail to perform their obligations under the terms of the contract. Some of these remedies could include specific performance, damages, attorney's fees, etc. Liquidated damages are damages that the parties agree to pay in case of a breach by either party. They reasonably reflect the amount of the loss that would result from a breach. Liquidated damages in a contract are not the same as a penalty. A penalty punishes a party by requiring them to pay a sum that is unconscionable or nonproportional to the loss that would have been suffered. Penalty clauses are void and unenforceable.