A General Introduction to

Contract

Definition of a contract

A contract is an agreement between competent parties based on the genuine assent of the parties, which is supported by consideration and made for a lawful objective and in the form required by law, if any.

The basic requirements of a valid contract

1. Agreement/genuine assent (a meeting of minds)

2. Valid consideration----mutual promise3. Formation (offer + acceptance =

contract)4. Capacity of parties to make a contract5. The legality of purpose or object of

contract6. The form of contract must conform to the

legal requirements A valid contract should include all these

essential elements and meet all these requirements.

Classification of contract

Written or oral contracts Bilateral or unilateral contracts Express or implied contracts Executed or executory contracts Valid, void, voidable contracts (P98—P104 Fundamentals of

Business Law)

According to their enforceability and validity, contracts can be classified into the following ones:

1 ___ has the necessary contractual elements, which is enforceable and has legal binding force.

2 ___ is not a contract at all. It has no legal effect. No parties should be bound by it.

3 ___ is a valid contract except that one party is entitled to rescind it.

.

Typical contract provisions Duties and obligations Representations and warranties Termination clauses Remedy clauses Arbitration clauses