BUS271 Chapter 7 - Introduction to Contracts

contract

a legally enforceable agreement created when two or more competent parties agree to perform, or avoid performing, certain acts that they have a legal right to do, and that meet certain legal requirements

common law

the source of contract law regarding the sale of fixed assets, services, or intangibles

offer and acceptance

an element of an enforceable contract that states that an offer is made by the offeror and accepted by the offeree; this indicates both parties’ intent to enter into the agreement

mutual agreement

an element of an enforceable contract that states that the parties must have a clear understanding of what they are undertaking, and the contract must show mutual agreement

consideration

an element of an enforceable contract that states that each party to a contract must promise to give up something of recognized tangible or intangible value

exchange of promises

when each party gives the other something of value

competent parties

an element of an enforceable contract that states that parties to a contract must be legally competent and capable of understanding what they are doing

legality of purpose

an element of an enforceable contract that states that the intent of the contract must not violate the law; courts will not enforce a contract that violates the law

proper form

an element of an enforceable contract that states that the form of a contract must be correct for the terms of the contract to be enforceable

oral contracts

contracts that are created entirely by conversation of the parties

written contracts

contracts that are reduced to writing on a permanent surface

express contracts

contracts that specifically states terms of agreement between the parties (written or oral)

implied contracts

a contract where rather than from oral or written words, its terms are derived from intentions of the parties inferred by their actions, from customs of the trade, or from conditions or circumstances

formal contracts

a written contract under seal; also known as the “specialty contract”

simple contracts

an informal contract made without seal (even though the subject matter of contract may be extremely complex and may involve huge amounts of money)

entire contracts

has two or more parts that are dependent on the others for satisfactory performance; also known as an “indivisible contract”

divisible contracts

a contract that is made up of two or more parts, and each part’s performance is independent of the others

executory contracts

a contract where a future act or obligation remains to be performed under its terms

executed contracts

a contract that has all of the terms of the agreement fully performed by both parties

void contracts

agreements lacking one or more essential elements of a contract

valid contracts

agreements meeting all legal terms resulting in obligations that are legally enforceable

voidable contracts

agreements that may be rejected by one of the parties for a legally acceptable reason

smart contract

a fully digital enforceable agreement using blockchain technology

cryptocurrency

a currency encrypted digitally into the blockchain platform so as to prevent unauthorized access