About This Chapter
Understanding Contract Law - Chapter Summary
Our instructors will define common contract law terms and definitions and follow up with an explanation of the parties in contract law. You will read about the concepts of mutual assent and objective standard as well as offers, termination and acceptance. The mailbox rule will be explained along with the sources of common law. The differences between various kinds of contracts, including bilateral and unilateral, expressed and implied, executed and executory and formal and informal, will be detailed for your review.
Your study will continue as you learn more about quasi-contracts and option contracts. Lessons on the rules of consideration, legal detriment and lack of consideration are included, as well. You will also learn about the definition and elements of doctrine of promissory estoppel and discover what joint obligation contracts entail. After you have read through this chapter, you should understand how to:
- Identify different contract types
- Define promisor, promisee and beneficiary
- Know how to terminate an offer
- Explain the mailbox rule and how it applies to contract law
- Describe what a quasi-contract is
- Differentiate between formal and informal contracts
- Outline the rules of consideration
- Detail the concept of doctrine of promissory estoppel
Use the chapter tests and lesson quizzes to gauge how well you understand the topic and where to focus any needed study. Our mobile-friendly study materials are available for you to review anytime, seven days a week. Use the printable transcripts accompanying each lesson to make copies to read offline at any time. If you need additional assistance as you work through the lessons, contact one of our instructors for help.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
16. 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.
17. 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.
18. 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.
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