Copyright

Ch 52: PLACE Business Education: Contract Law

About This Chapter

Contract law is a complex and extensive topic that can confuse even the most seasoned business veterans. Make sure you understand contract law by viewing the lessons in this chapter in preparation for the PLACE Business Education exam.

PLACE Business Education: Contract Law - Chapter Summary

Contract law refers to the laws surrounding agreements between businesses, or businesses and customers. The video lessons in this chapter cover the following topics that may appear on the PLACE Business Education exam:

  • Types of contracts and contract law terminology
  • Promiser, promisee and beneficiary
  • Mutual assent and objective standard
  • What qualifies as an offer
  • Methods of contract termination and acceptance
  • The mailbox rule
  • Common law and uniform commercial code
  • Contrast between implied contracts and expressed contracts and unilateral and bilateral contracts
  • Other types of contracts, including informal, formal, option, joint obligation and quasi-contracts
  • Executed and executory contracts
  • Rules of consideration and legal detriment
  • Doctrine of promissory estoppel

You'll get a chance to study these topics and more through engaging videos that are short in length, but never lacking in the detail you need to know to feel prepared for the PLACE Business Education exam. Each lesson also contains an interactive quiz. With the extra study materials, you're sure to get the information necessary.

PLACE Business Education: Contract Law Chapter Objectives

Accounting, Finance and Business Law is one of five sections of the PLACE Business Education exam. Some of the questions in this section will ask you pertinent details about contract law, such as the definition of quasi-contracts and executory contracts, all of which are covered in this chapter. The questions in this section are multiple choice, and you can use the end-of-lesson quizzes to preview the types of questions that will appear on the exam.

19 Lessons in Chapter 52: PLACE Business Education: Contract Law
Test your knowledge with a 30-question chapter practice test
Contract Law Terms: Definitions & Contract Types

1. Contract Law Terms: Definitions & Contract Types

A contract is an agreement between two or more parties to perform a service, provide a product or commit to an act and is enforceable by law. There are several types of contracts, and each have specific terms and conditions.

Parties to a Contract: Promisor, Promisee & Beneficiary

2. Parties to a Contract: Promisor, Promisee & Beneficiary

There are at least two parties involved in a contract: the promisor, promisee and, sometimes, a third party beneficiary may be named. Each party has a different obligation to the contract terms. The beneficiary in a contract generally does not have the same level of responsibility for the contract's performance.

Mutual Assent & Objective Standard in Contract Law: Definitions & Examples

3. Mutual Assent & Objective Standard in Contract Law: Definitions & Examples

Mutual assent is considered the meeting of the minds between two or more parties that forms the foundation of a contract. At the time of mutual assent, it can be said that a legally binding contract exists.

What Is an Offer in Contract Law?

4. What Is an Offer in Contract Law?

In contract law, an offer is a promise in exchange for performance by another party. An offer can be revoked or terminated under certain conditions. There are also times when an offer can be negotiated to create a counter-offer.

Termination of an Offer in Contract Law: Methods & Examples

5. Termination of an Offer in Contract Law: Methods & Examples

There are several ways in which a contract can be terminated, including performance, impossibility of performance and breach of contract. Other ways to end a contractual agreement are a bit more complicated and involve a prior commitment on the part of one or both of the parties or even revocation.

What Is Acceptance in Contract Law? - Definition, Rules & Examples

6. What Is Acceptance in Contract Law? - Definition, Rules & Examples

There are essentially six elements in a contract. Once an offer is made, the next element is acceptance. Offer and acceptance combined with consideration make for the glue that creates a binding contract.

The Mailbox Rule and Contract Law

7. The Mailbox Rule and Contract Law

The mailbox rule applies to offer and acceptance in contract law. This common law practice, by default, states that when an offer or acceptance reaches the mailbox, it means a legitimate offer has been extended or the offer has been accepted.

Sources of Contract Law: Common Law & Uniform Commercial Code

8. Sources of Contract Law: Common Law & Uniform Commercial Code

There are two sources of contract law: common law, which is based on case rulings, and statutory law, which is based on federal and state statutes. Contract law uses both common law and a set of statutory rules known as the Uniform Commercial Code.

Unilateral and Bilateral Contracts: Examples & Differences

9. Unilateral and Bilateral Contracts: Examples & Differences

There are two types of contracts: a unilateral contract and a bilateral contract. The essential difference between the two is in the parties. Unilateral contracts involve only promisor while bilateral contracts involve both a promisor and a promisee.

Expressed vs. Implied Contracts: Differences & Examples

10. Expressed vs. Implied Contracts: Differences & Examples

There are two types of contracts: an expressed contract, which states the promises in clear language, and an implied contract, which is where behaviors or actions lead parties to believe an agreement exists.

Quasi-Contract: Definition & Examples

11. Quasi-Contract: Definition & Examples

A quasi-contract exists in the absence of a written contract and may be court ordered to avoid one party gaining at the expense of another party's actions.

Executed vs. Executory Contracts: Definitions & Differences

12. Executed vs. Executory Contracts: Definitions & Differences

The main difference between an executed and executory contract is how quickly the contract's promise must be fulfilled. An executed contract must be satisfied immediately, while an executor contract has terms that will be fulfilled later.

Informal vs. Formal Contracts: Examples, Differences & Definitions

13. Informal vs. Formal Contracts: Examples, Differences & Definitions

The distinct difference between a formal contract and an informal contract is its enforceability in a court. An enforceable contract is one that contains certain elements, like offer, acceptance, and consideration, and is in written form. An informal contract does not contain the same elements and can be oral.

What Is an Option Contract? - Example & Definition

14. What Is an Option Contract? - Example & Definition

The difference between a contract and an option contract is in the options that a buyer has a right to exercise in the contract, which makes the contract a bit more flexible.

Rules of Consideration in Contract Law: Elements & Case Examples

15. Rules of Consideration in Contract Law: Elements & Case Examples

Consideration in contract law is simply the exchange of one thing of value for another. It is one of the six elements that must be present for a contract to be enforceable. Consideration must be both legally sufficient and bargained-for by the receiving party.

Legal Detriment: Definition & Example

16. Legal Detriment: Definition & Example

In contract law, a party to a contract experiences legal detriment when they perform an act the party is not obligated to perform or refrain from doing something the party has a right to do.

Lack of Consideration in Contract Law

17. Lack of Consideration in Contract Law

One of the main elements of a contract is consideration. Lack of consideration in contract law can make a contract unenforceable when both parties do not receive a benefit from entering into an agreement.

Doctrine of Promissory Estoppel: Definition, Examples & Elements

18. Doctrine of Promissory Estoppel: Definition, Examples & Elements

The doctrine of promissory estoppel allows a party to recover the benefit of a promise made even if a legal contract does not exist. Use of this doctrine relies on how significant the promisee's loss is in the absence of the fulfilled promise.

Joint Obligation Contracts:  Obligations and Promises of Parties

19. Joint Obligation Contracts: Obligations and Promises of Parties

A joint contract involves two or more parties who are jointly obligated to a contract or whom receive the benefits of the terms and conditions of a contract. There are a few ways a joint contract can be written. Each type shifts liability in a different way.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Other Chapters

Other chapters within the PLACE Business Education: Practice & Study Guide course

Support