What Are Contract Obligations?

Contract obligations are those duties that each party is legally responsible for in
a contract agreement. In a contract, each party exchanges something of value, whether it be a
product, services, money, etc. On both sides of the agreement, each party has various obligations in
connected with this exchange.

An example of contract obligations is with the sale of a product such as an automobile. One party
has the obligation to transfer ownership of the car, while the other has the obligation to pay for
it. The contract will specify the terms that regulate the obligations, such as the method and amount
of payment, and the time/place of delivery. 

If either party fails to perform their contractual obligations according to the contract terms, it will
usually result in a breach of contract. This may result in a damages award to reimburse the non-
breaching party for their economic losses.