Legal Obligation Definition
A legal obligation is a promise made by one party to another in which the law requires the first party to perform an act, or refrain from taking an action. The purpose of a legal obligation is to create certainty and predictability in relationships between people, so that they can rely on each other to uphold their end of the bargain. Without legal obligations, it would be difficult for individuals and businesses to trust each other enough to enter into contracts or engage in other transactions.
There are two types of legal obligations: contractual and non-contractual. Contractual obligations are created when two or more parties agree to enter into a contract, such as a lease agreement or a loan agreement. Non-contractual obligations arise from other sources, such as tort law (e.g., if you injure someone through negligence) or criminal law (e.g., if you commit a crime).
Legal obligations are enforced by courts, which have the power to order the breaching party to take specific actions (such as paying damages) or issue sanctions (such as ordering the dissolution of a contract). In some cases, failure to comply with a legal obligation can result in imprisonment.
