Business Law Chapter 6

Bilateral Contract

An offer for this (the most common type ) is one in which a promise (offer) is made by one party in return for a promise made by another party.

Implied Contract

Contract formed from actions of the parties.

Quasi Contract

Contract implied in law to prevent one from benefitting at another's expense.

Unilateral Contract

Contract in which a promise (offer) is made by one party in return for the performance of a specific act by the other party. In other words the party does not become effective until the act is performed.

Express Contract

Contract in which the agreement is specifically stated.

Informal Contract

Contract prepared without formalities. The parties are free to use any style of language they wish.

Executed Contract

Contract that has been completely carried out.

Void Contract

Contract that has no legal effect and cannot be enforced.

Executory Contract

Contract that has not been fully performed by one or all parties.

Voidable Contract

A contract that is completely valid and enforceable against all parties unless and until a party legally entitled to avoid the contract decides to do so by claiming some defect in the creation of the agreement. A minor for example may avoid some contracts.

Valid Contract

Is a contract that contains all the essential elements of a contract: offer and acceptance, consideration, competent parties, and legal purpose. IT is legally binding on all parties to the agreement.

Unenforceable Contract

Is a contract that is legal in all respects but fails to meet some requirement of the law. As a result, a court will not enforce the contract against either party.

Legality

THis means that the contract must not be against the law. THe courts will not force a contract if the parties knowingly entered into an illegal agreement and then demand performance.

Contract

This is a voluntary legally binding agreement between two or more people or businesses that sets forth what the parties will or will not do.

Breach of Contract

This is the failure to carry out one's part of the agreement

Agreement

This is the initial step towards forming a contract. This is accomplished by a process called offer and acceptance. T

Formal Contract

Written contract prepared with certain formalities including a seal.