A contract is a written agreement between parties which outlines the promises between them, held enforceable by law.
Types of Contracts
Contract under seal: A contract with the requirement of a seal that recognizes the acceptance of the agreement and the consequences if there is a breach in the contract.
Express Contract: A contracts which is written or orally spoken in which both parties have accepted.
Implied Contract: A contract based on the intention of an agreement on which is based on certain circumstances.
Executed Contract: A contract signifying that both parties have fulfilled their agreement in the previous contract and that contract is ineffective anymore.
Bilateral Contract: A contract made with mutual agreements to fulfill an action in return for a corresponding action
Unconscionable Contract: An unfair and unreasonable contract which is in favour of one side of the party.
Aleatory Contact: A contract which is in effect due to certain circumstances (A contract with a car insurance company- Car crash)
Elements of a Contact
Mutual Consent: Both parties must have an understanding of the contract: penalties, limitations, procedures alike.
Offer and Acceptance: There must be the presence of an offeror (person making the offer) and offeree (person receiving the offer)
Mutual Consideration: The mutual (on both sides) exchange of something in value: a salesman sells a product for cash.
Bona Fide: Acting in good faith. So long as individuals do not purposely or knowingly deceive
No Violation of Public Policy: If the contract infringes on and public policy i.e. gambling then it is not enforceable
Competent Parties: There are certain rules in place that leave infants, intoxicated or mentally incapacitated people of their contracts; hold them void.
Statute of Frauds: No suit or action will be taken on certain contracts without written memorabilia; enacted in 1677 by the English Parliament to avoid nonexistent agreements/ fraud.
Reality of Consents
Mutual Mistake: The contract becomes void due a mutual mistake of fact from both parties
Illiteracy: Illiteracy does not void the contract due to the face the illiterate person is capable to give their consent
Fraud: Fraud is when one party is deceiving another to persuade the other party to enter into the contract making the mutual agreement invalid.
Duress: An act done by a party as a threat to force a party to an unreasonable agreement or an agreement they would not normally sign.
Undue Influence: Unlawfully influence of one party which alters first will of another party to change.