A voluntary agreement between two legally competent parties to perform or refrain from performing a legal action for traditional consideration essential elements of a valid contract:

• Qualified parties- must be lawfully eligible by age and mental competence.
• An offer and acceptance ( mutual consent)-“must be a meeting of the minds.”
• The purpose of the contract must be legal
• Consideration- a promise to perform
• Description of what the deal entails
• Written and signed

Contract Classifications

• Expressed-showing intent with words, orally or written
• Implied-agreement demonstrated by acts and conduct
• Unilateral-only one party makes a promise
• Bilateral-both parties promise to perform something
• Executed-both parties have fulfilled their promises
• Executory-something remains to be done by either party

Legal Effect of a Contract

• Valid-Binding and enforceable on both parties
• Void-Lacks an essential element of a valid contract- has no legal effect
• Voidable-may appear to be valid on the surface, but legally voidable by some illegal act
• Unenforceable-may appear to be valid, but legally not

Discharge of Contract

• Performance-all terms performed
• Substantial performance-contract still in effect, needs to be completed
• Mutual agreement-parties agree to cancel
• Operation of Law-can for various legal reasons