Business
Contracts
Contracts are legally binding agreements between two or more parties that outline the terms and conditions of a business arrangement. They can cover a wide range of transactions, from the sale of goods and services to employment relationships. Contracts typically include details such as the parties involved, the scope of work, payment terms, and any applicable legal provisions.
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8 Key excerpts on "Contracts"
eBook - PDFLaw
Made Simple
- D. L. A. Barker, C. F. Padfield(Authors)
- 2014(Publication Date)
- Made Simple(Publisher)
7 THE LAW OF CONTRACT In his book Principles of the Law of Contracts, Sir William Anson defined a contract as a legally binding agreement made between two or more parties, by which rights are acquired by one or more to acts or forebearances on the part of the other or others. Shortly it may be defined as an agreement between two or more parties which is intended to have legal consequences. The agreement referred to in the definition means a meeting of minds, called in law consensus ad idem, signifying that the parties are agreed together about the same thing. The definition also emphasizes that the parties to the contract must intend that their agreement shall be legally enforceable. Unless the law regognizes this and enforces the agreements of parties, it would be impossible to carry on commercial or business life. For this reason the law of contract plays a leading role in courses on business studies. These contractual agreements give rise to rights and obligations which the law recognizes and enforces. But certain agreements, such as domestic and social arrangements, are not intended by the parties to be legally binding. The law allows for this. Thus, if Cumming and Gowing agree to meet for dinner and Gowing fails to turn up, the law will do nothing in the matter. The agreement was not intended to create legal rights and duties, and, as such, it is not a contract in law. Every contract is an agreement, but not every agreement is a contract. The object of the law of contract is to identify those agreements which it will enforce and those which it will not. This is of prime importance and will be referred to later in more detail. 1. Essentials of a Valid Contract An agreement will be enforced when the following essential elements exist: (a) Offer and Acceptance. There must be an offer by one party and an acceptance of it by the other. (b) Intention to create legal relations. (c) Capacity of the parties. Each party must have the legal capacity to make the contract.
eBook - ePubBusiness Law
A Straightforward Guide
- (Author)
- 2014(Publication Date)
- Straightforward Publishing Digital(Publisher)
Ch. 1
BUSINESS LAW-THE LAW OF CONTRACT
Underpinning all Contracts are four main principles:
1) A contract is an agreement between the parties to that contract-one person makes an offer and the other accepts that offer 2) Both parties have an intention to be legally bound by the agreement-this is usually known as an intention to create legal relations3) Parties to the agreement need to be absolutely clear as to the terms of the agreement – this is the main area of contention with Contracts, as we will see laterc4) There must be consideration provided by each of the parties to the contract – this means that one person promises to give or deliver and the other promises to pay. The offer and the payment – either monetary or in kind - is the consideration. When making a contract, or entering into a contract all parties to the contract must have the legal capacity to enter into a contract. Very importantly, a contract, in most cases, does not have to be in writing – a piece of paper is not necessary, the agreement and evidence of that agreement forms the basis of contract. There are a few important exceptions, including Contracts relating to interests in land (Law of property (Miscellaneous Provisions) Act 1989, s 2(1)) and consumer credit (Consumer Credit Act 1974).Other factors affecting formation include: • Form-the way the contract is created (e.g. the sale of land can only be made in the form of a deed) Form is an issue with specialty Contracts but not with simple Contracts• Privity of contract and the rights of third parties-generally a contract is only enforceable by or against a party to it, subject to exceptions and certain third party rights are now protected in the Contracts (Rights of Third Parties) Act 1999.The nature of Contracts – unilateral and bilateral Contracts
The majority of Contracts entered into are known as Bilateral Contracts. This quite simply means that each party to a contract agrees to take on an obligation. This obligation is underpinned by a promise to give something to the other party. A Unilateral contract will arise where one party to the contract will make a promise to do something (usually to pay a sum of money) if the other party carries out a certain task. Examples of this are where you might undertake to pay someone a sum of money if they shave off their hair for charity or give up smoking. Estate agents enter into unilateral Contracts whereby a percentage of sales go to the agent if they sell the property. However, the agent is not legally bound to sell the property, just to try to sell it.
eBook - PDF- Richard Mann, Barry Roberts(Authors)
- 2019(Publication Date)
- Cengage Learning EMEA(Publisher)
178 After reading and studying this chapter, you should be able to: promise to pay certain taxes, and the buyer may prom- ise to assume a mortgage on the property or to pay the purchase price to a creditor of the seller. If the parties have lawyers, they very likely have Contracts with these lawyers. If the seller deposits the proceeds of the sale in a bank, he enters into a contract with the bank. If the buyer rents the property, he enters into a contract with the ten- ant. When one of the parties leaves his car in a parking lot to attend to any of these matters, he assumes a con- tractual relationship with the owner of the lot. In short, nearly every business transaction is based on contract and the expectations the agreed-upon promises create. It is, therefore, essential that you know the legal requirements for making binding Contracts. E very business enterprise, whether large or small, must enter into Contracts with its employees, its suppliers of goods and services, and its customers in order to conduct its business operations. Thus, contract law is an important subject for the business manager. Contract law is also basic to fields of law treated in other parts of this book, such as agency, partnerships, corpora- tions, sales of personal property, negotiable instruments, and secured transactions. Even the most common transaction may involve many Contracts. For example, in a typical contract for the sale of land, the seller promises to transfer title, or right of ownership, to the land and the buyer promises to pay an agreed-upon purchase price. In addition, the seller may 1. Distinguish between Contracts that are covered by the Uniform Commercial Code and those covered by the common law. 2. List the essential elements of a contract. 3. Distinguish among (a) express and implied Contracts; (b) unilateral and bilateral Contracts; (c) valid, void, voidable, and unenforceable agreements; and (d) executed and executory Contracts.
eBook - PDFStarting & Building a Nonprofit
A Practical Guide
- Peri Pakroo(Author)
- 2024(Publication Date)
- NOLO(Publisher)
Many people use the terms “contract” and “agreement” interchangeably, but technically, the question boils down to whether the deal is binding, enforceable in a court of law. Some Contracts are 50-page documents filled with Latin phrases and legal boilerplate; others are two- or three-sentence agreements scratched out on a napkin. Regardless of its length or formality, a contract will be legally binding if it meets these two requirements: • The parties have reached an agreement—that is, an offer has been made by one party and accepted by the other. • Promises or other things of value have been exchanged, such as money, merchandise, or a promise to perform services. Generally, a contract is legally binding whether or not it is in writing. However, there are some situations when a contract must be in writing to be valid—these are covered in “Oral Versus Written Contracts,” below. ! CAUTION Nonprofits must honor their Contracts, just like other businesses. The legal rules covering Contracts apply to nonprofits just the same as any other entity. As long as the contract is valid under the rules of contract law (as described in this section), it binds a nonprofit just as it would a for-profit business or any other entity. Agreement Between Parties Although it might seem obvious, a contract is valid only if all parties really do agree on every major issue. Sounds simple enough, but in real life it can often be hard to tell the difference between a preliminary CHAPTER 8 | UNDERSTANDING Contracts AND AGREEMENTS | 161 discussion and a true agreement. To help bring the dividing line into clearer focus, the law has developed rules that define when an agreement has been reached. The basic rule is that an agreement exists when one party makes an offer and the other party accepts it. If the acceptance of the offer is followed by an exchange of promises or other things of value (discussed next), a binding contract has been created.
eBook - PDF- Douglas Wood, Paul Chynoweth, Julie Adshead, Jim Mason(Authors)
- 2021(Publication Date)
- Wiley-Blackwell(Publisher)
2 The Law of Contract 2.1 General principles The law of contract is frequently the fi rst ‘ case law ’ subject to which students are introduced when they commence their legal studies. The main reason for this is that Contracts affect the general public more than most areas of law and arise daily in business and commercial life. The contract is the most important stage in the process when land or buildings are transferred and when building projects are undertaken. The ‘ golden age ’ of the law of contract was in the nineteenth century when its major principles were evolved on free market ideologies. Many of the cases referred to in this chapter date from this ground breaking period. The case illustrations used are not limited to this period, however, and the case law referred to in this chapter ranges from the very old to the very modern. A contract is a legally binding agreement. It is a bargain and each side, or party to the contract, must contribute something to it for it to be valid. Not every agreement is a contract nor is it intended to be so. The legally binding element must be present before a valid contract can emerge. In other words the parties must be able to demonstrate their intention to adhere to the agreement made. The protection afforded by entering into a contract is that if it is broken by one party to it, the other party must be able to take the contract-breaker to court if desired. A distinction is made between the situation where the parties exchange mutual promises, known as a bilateral contract, and a unilateral contract where one party promises to do something in return for the other party carrying out some task. When the task is completed the promise made in a unilateral contract becomes enforceable. 2.2 Formalities A contract may be made in any form that the parties wish. This is the case regardless of the sums involved or the complexity of the agreement.
eBook - PDFCommercial Contracts
A Practical Guide to Deals, Contracts, Agreements and Promises
- Chris Thorpe, John Bailey(Authors)
- 1996(Publication Date)
- Woodhead Publishing(Publisher)
This of course covers the majority of commercial transactions, excluding only the very large and the very small. When in this situation a dispute subsequently arises about whether there was a contract or what the terms of it were, the court will resolve those issues by a rigorous examination of those com-munications in terms of offer and acceptance. As we shall see in relation to standard terms and conditions, in some situations the 51 the terms of the contract being contained in the memorandum and articles of association of the company. But I have no idea who the other shareholders are, and it is very hard to see how there can be an offer and an acceptance between parties who are not even aware of each other's existence. Commercial Contracts 3.2 Consideration The words 'contract', 'deal' and 'transaction' all carry with them the notion of an exchange, typically the exchange of goods or services for money. An agreement which lacks this element of mutuality would not be called a deal or transaction and is not in legal terms a contract. So if A agrees to sell his car to B for £100, that is an enforceable agreement. But if A agrees to give his car to B, B cannot enforce that agreement against A. The legal expression of this requirement is that, for an agreement to amount to a contract, each party must 'provide consideration' for it. 3.2.1 The requirement of consideration Exactly how 'consideration' should be defined is a favourite aca-demic question, but the best way to think of it is this: a party provides consideration if the agreement involves him undertaking to do something. If each party undertakes to do something, then the requirement of consideration from each party is satisfied. But if one party has not undertaken to do anything, then the agreement is completely unenforceable because that party has provided no consideration.
- Pamela Tepper(Author)
- 2021(Publication Date)
- Cengage Learning EMEA(Publisher)
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding between the parties. This agreement shall be binding upon the heirs, personal representatives, successors and assigns of both the Seller and Buyer. This Agreement may only be amended in writing and signed by both parties. Time is of the essence in the performance of this Agreement. 15. GOVERNING LAW. This Agreement shall be governed by and enforced in accordance with the laws of the state of [add in your state] If jurisdiction should be exclusive in a state or county, state it in the document. 16. SPECIAL PROVISIONS: [Any special provisions between the parties should be listed here.] SIGNED THIS day of , 20 . DATE SELLER DATE PURCHASER [Always check laws of state to determine whether the signatures of the parties need to be witnessed or acknowledged.] Additional terms Signature: acceptance of terms by parties giving mutual assent 10th January 21 Jan 10, 2021 Jan 11, 2021 s/ Robert Wynn s/ Dennis Beerely SUMMARY 2.1 A contract is an agreement between two or more parties for value that is legally enforceable. All Contracts must have six elements to be binding. The elements are offer, acceptance, consideration, mutual assent, capacity, and legality. Another element to consider is proper form, such as under the Statute of Frauds. 2.2 Contracts can have different classifications: (1) bilat- eral and unilateral; (2) express and implied; (3) executed and executory; (4) void, voidable, and unenforceable; and (5) formal and informal. In a bilateral contract, the parties exchange a promise for a promise, whereas in a unilateral contract only one party makes a promise, with the other party required to do some act in return. An express contract is one that is specifically stated. It can be oral or written. An implied contract, however, may be one of two types.
eBook - PDF- Richard Stone, James Devenney(Authors)
- 2017(Publication Date)
- Routledge(Publisher)
By emphasizing how modern ideals of social justice channel market transactions into approved patterns, this conception of contract removes the assumption that the law provides an open-ended facility for making binding commitments. Although some flexibility persists, especially with regard to the price, this freedom should be regarded as a privilege granted on stringent conditions, rather than a general licence to enter contractual obligations of one’s choice. For Collins, then, contract law is concerned with mechanisms for controlling market transac-tions. ‘Contract’ is a device that can be used by those who want to clothe an exchange with legal enforceability. By constructing their transaction in a way that the courts will recognise as ‘contrac-tual’, they ensure that if anything goes wrong, legal remedies will be available. The agreement will also have the effect of allocating risks between the parties – deciding who is to bear the loss in the event of problems. There are some problems with this analysis, however. In particular it does not explain how the transfer of property by ‘deed’, which the courts treat as a type of contract, does not need to involve an exchange in order to be enforceable. Brownsword suggests that it may not be feasible to find one single definition which will work: Brownsword, R, Contract Law: Themes for the 21st Century , 2nd edn, 2006, Oxford: OUP, pp 14–15 Definition A contract, it seems, is one of those phenomena that is relatively easy to recognise but diffi cult to define. On the one hand, to state some truisms, one of the functions of the law of contract is to discriminate between those transactions that are enforceable as Contracts and those that are not. Doctrine lays down the constit-uents of a contract (agreement, consideration, certainty, intention and, in exceptional cases, written formal-ity) as well as stipulating the conditions of enforceability (the absence of fraud, coercion, illegal purpose and so on).
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