1) n. an agreement with specific terms between two or more persons or entities in
which there is a promise to do something in return for a valuable benefit known
as consideration. Since the law of contracts is at the heart of most business dealings,
it is one of the three or four most significant areas of legal concern and can involve
variations on circumstances and complexities. The existence of a contract requires
finding the following factual elements a) an offer; b) an acceptance of that offer
which results in a meeting of the minds; c) a promise to perform; d) a valuable
consideration (which can be a promise or payment in some form); e) a time or event
when performance must be made (meet commitments); f) terms and conditions for performance,
including fulfilling promises; g) performance, if the contract is "unilateral".
A unilateral contract is one in which there is a promise to pay or give other consideration
in return for actual performance. (I will pay you $500 to fix my car by Thursday;
the performance is fixing the car by that date. ) A bilateral contract is one in
which a promise is exchanged for a promise. (I promise to fix your car by Thursday
and you promise to pay $500 on Thursday. ) Contracts can be either written or oral,
but oral contracts are more difficult to prove and in most jurisdictions the time
to sue on the contract is shorter (such as two years for oral compared to four years
for written). In some cases a contract can consist of several documents, such as
a series of letters, orders, offers and counteroffers. There are a variety of types
of contracts "conditional" on an event occurring; "joint and several," in which
several parties make a joint promise to perform, but each is responsible; "implied,"
in which the courts will determine there is a contract based on the circumstances.
Parties can contract to supply all of another's requirements, buy all the products
made, or enter into an option to renew a contract. The variations are almost limitless.
Contracts for illegal purposes are not enforceable at law. 2) v. to enter into an
agreement.
See also adhesion contract bilateral contract consideration oral contract unilateral
contract
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