Contract and Agreement
CHAPTER 11 NATURE AND CLASSES OF CONTRACTS
CHAPTER OUTLINE
A. NATURE OF CONTRACTS
1. DEFINITION OF A CONTRACT general rule. A contract is a legally binding agreement. Stated another way, "a contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." (Restatement, Contracts, 2d) study hint. The essence of a contract is that (1) by mutual agreement (2) parties create obligations that can be legally enforced.
2. ELEMENTS OF A CONTRACT
Elements of a valid contract are: (1) an agreement; (2) competent parties; (3) genuine assent to the contract; (4) consideration given by each party; (5) legal purpose; and (6) proper form of contract.
3. SUBJECT MATTER OF CONTRACTS
A contract may relate to virtually any type of transaction. Contracts may relate to performance of a service, sale or transfer of ownership of property, or a combination of such transactions.
4. PARTIES TO A CONTRACT general rules. Parties to a contract may be persons, partnerships, corporations, or governments. There may be more than two parties to a contract (e.g., a credit card transaction).
With some exceptions, only the parties making a contract have rights or duties under the contract. study hints. Parties can have special names, such as promisor (party making a promise) and promisee (party to whom a promise is made); lessor (party who leases property) and lessee (party to whom property is leased). Privity of contract means two parties directly contracted with each other.
5. HOW A CONTRACT ARISES general rules. A contract is created by an agreement. An agreement is made when an offeror makes an offer, and the offeree accepts the offer by making an acceptance. study hints. A contract cannot be made without both an offer and an acceptance. An offer may be made to a particular person or an offer may be made to the public.
CHAPTER OUTLINE
A. NATURE OF CONTRACTS
1. DEFINITION OF A CONTRACT general rule. A contract is a legally binding agreement. Stated another way, "a contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." (Restatement, Contracts, 2d) study hint. The essence of a contract is that (1) by mutual agreement (2) parties create obligations that can be legally enforced.
2. ELEMENTS OF A CONTRACT
Elements of a valid contract are: (1) an agreement; (2) competent parties; (3) genuine assent to the contract; (4) consideration given by each party; (5) legal purpose; and (6) proper form of contract.
3. SUBJECT MATTER OF CONTRACTS
A contract may relate to virtually any type of transaction. Contracts may relate to performance of a service, sale or transfer of ownership of property, or a combination of such transactions.
4. PARTIES TO A CONTRACT general rules. Parties to a contract may be persons, partnerships, corporations, or governments. There may be more than two parties to a contract (e.g., a credit card transaction).
With some exceptions, only the parties making a contract have rights or duties under the contract. study hints. Parties can have special names, such as promisor (party making a promise) and promisee (party to whom a promise is made); lessor (party who leases property) and lessee (party to whom property is leased). Privity of contract means two parties directly contracted with each other.
5. HOW A CONTRACT ARISES general rules. A contract is created by an agreement. An agreement is made when an offeror makes an offer, and the offeree accepts the offer by making an acceptance. study hints. A contract cannot be made without both an offer and an acceptance. An offer may be made to a particular person or an offer may be made to the public.