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
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