As a member, you'll also get unlimited access to over 75,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.
Try it risk-freeAlready registered? Log in here for access
Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.
When two or more parties jointly obligate themselves in a contract, they enter into a joint contract. By entering into a joint contract, all parties become equally and wholly responsible for the obligations of the contract or benefit wholly from the contract in its entirety. This sounds confusing. Let's use an example to help clear things up.
Jeffrey and Wayne are freshmen attending University of Smartsville. Neither student could afford their own apartment, so they decided to become roommates. Their landlord, Mr. Rupert, presented the boys with a lease agreement. In the lease, it stated that both Jeffrey and Wayne would be wholly responsible for paying the rent. This means that regardless of who coughs up the cash, the entire rent amount must be paid at month's end. Mr. Rupert doesn't much care how it happens, as long as it happens.
You see, the lease is worded in such a way that it obligates both Jeffrey and Wayne to the rent amount. If Wayne withdraws from college, Jeffrey is responsible for the entire rent payment. The elements of a contract remain the same as any bilateral contract one would enter into:
The only difference between a joint contract and a bilateral contract is the parties involved. In a bilateral contract, there are generally two parties, an offeror and an offeree and both have specific obligations. In a joint contract, the offeror or offeree can be more than one party, thus holding both jointly responsible for the contract terms. Joint contracts also have survivorship, meaning that should one of the jointly obligated parties die, the remaining party remains obligated to the conditions.
For Jeffrey and Wayne, if one of the students should face an untimely death, the other would remain responsible for the rent. Sometimes, joint contracts can be written so that they do not necessarily join two parties wholly. In this case, the contract would be shared in several.
When a contract involves two parties who are not wholly joined, but joined severally, it takes on a slightly different liability. In contract law, severally obligates joint contract parties in the same way but changes the liability. To exemplify this, let's revisit Jeffrey and Wayne's lease agreement with Mr. Rupert. Jeffrey and Wayne entered into a lease agreement in where they owe $900 per month.
In a joint contract, if Wayne stopped paying, Jeffrey would have to pay the entire $900 to the landlord. In severalty, Mr. Rupert can go after Wayne's assets, Jeffrey's assets, or an equal share of both. This sounds confusing - it's really not!
Think of it this way, if a contract states, 'joint' obligation, think of it as both jointly bound parties are obligated to the contract terms. If one bails, the other party must pay up. In severalty, both jointly obligated parties are responsible for the contract terms. However, if one jointly obligated party jumps, the other party to the contract can take civil action against the defaulted party, the party remaining in the contract or both. Lastly, a joint contract may be written where jointly bound parties are responsible for only their share of the contract terms.
Using the lease agreement example, Jeffrey and Wayne may request that Mr. Rupert draft the lease obligating each of the students separately. This can be done by writing a clause that obligates Jeffrey for $450 and Wayne for $450. If one of the boys doesn't pay his share of the rent, the other is not obligated to make up the difference. Notice the shift of liability - it is no longer on the renters as a joint obligation. Mr. Rupert stands to lose on a lease agreement written this way. And typically, a savvy landlord will not enter into this type of lease.
By entering into a joint contract, all parties become equally and wholly responsible for the obligations of the contract or benefit wholly from the contract in its entirety. There is a less obligating form of a joint contract that binds the parties severally, meaning that if one of the joined parties defaults, the other party to the contract can go after either or both parties.
A joint contract can also be written to where both joined parties hold only their share of obligation. If one should default, the jointly obligated party is responsible to perform what is stated in the contract. This shifts liability from both to one of the joined parties. Generally, this is not in the best interest of all parties, just the joined party.
Remember, just like any bilateral contract, the same elements apply:
It is important to understand the difference between a joint and a several contract before signing. It can mean the difference between full liability or a share of liability.
Working your way through this lesson should help you accomplish the following:
To unlock this lesson you must be a Study.com Member.
Create your account
Already a member? Log In
BackAlready registered? Log in here for access
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Back To Course
CLEP Introductory Business Law: Study Guide & Test Prep26 chapters | 213 lessons | 35 flashcard sets
{{courseNav.course.topics.length}} chapters | {{courseNav.course.mDynamicIntFields.lessonCount}} lessons | {{course.flashcardSetCount}} flashcard set{{course.flashcardSetCoun > 1 ? 's' : ''}}
| 30 day money back guarantee | |||
|
Starting Original Price |
/yr | /mo | |
| Just Just | /day | ||
| Discount For months |
- % - | / | |
| Referral Credit | - | ||
|
Price after trial Starting Price starting today |
/ | ||
| Referral Credit |
- | ||
| Price starting today | / | ||
| Just Just | Just Just | /day | |
| Save % off monthly plan | /mo | ||
| Just | /mo | ||
| Price | /yr | ||
Your Cart is Empty. Please Choose a Product.
Watch 5 minute video clips, get step by step explanations, take practice quizzes and tests to master any topic.
Study.com has a library of 350,000 question and answers for covering your toughest textbook problems
I love the way expert tutors clearly explains the answers to my homework questions. Keep up the good work!
- Maritess, College StudentStudy.com video lessons have helped over 30 million students.
"I learned more in 10 minutes than 1 month of chemistry classes"
- Ashlee P.
"I learned more in 10 minutes than 1 month of chemistry classes"
- Ashlee P.
"I aced the CLEP exam and earned 3 college credits!"
- Clair S.
Over 65 million users have prepared for {{displayNameByProductKey[registrationData.product || cocoon]}} and other exams on Study.com
"The videos have changed the way I teach! The videos on Study.com accomplish in 5 minutes what would take me an entire class."
- Chris F.
Over 65 million users have prepared for {{displayNameByProductKey[registrationData.product || cocoon]}} and other exams on Study.com
Over 65 million users have prepared for {{displayNameByProductKey[registrationData.product || cocoon]}} and other exams on Study.com
