Section 4.1

Agreements and Contracts

Section 4.1 Agreements and Contracts

A contract is any agreement enforceable by law.

Section 4.1 Agreements and Contracts

A contract requires six elements:

offer

capacity

legality

acceptance

consideration

genuine agreement

Section 4.1 Agreements and Contracts

An offer is a proposal to do something or pay an amount to another party.

Acceptance is when a party agrees to an offer made by another party.

Section 4.1 Agreements and Contracts

Capacity is the legal ability to enter into a contract.

Consideration is something of value offered or exchanged.

Section 4.1 Agreements and Contracts

Legality means that a contract may not involve breaking the law.

Genuine agreement means that a legal offer is met with a legal acceptance.

Section 4.1 Agreements and Contracts

Contracts can be valid, void, voidable, or unenforceable.

A contract is valid if it is legally good.

A contract is void if it lacks one or more of the elements of a contract.

Section 4.1 Agreements and Contracts

A contract is voidable if either party can cancel the contract for a legal reason.

A contract is unenforceable if it will not hold up in court.

Section 4.1 Agreements and Contracts

A contract can be express or implied.

An express contract is a contract stated in words and may be either written or oral.

An implied contract comes about from the actions of the parties.

Section 4.1 Agreements and Contracts

Contracts may be unilateral or bilateral.

A bilateral contract is when both parties promise to do something.

A unilateral contract is when one party promises to do something only if the other party does something.