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1) n. an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration. Since the law of contracts is at the heart of most business dealings, it is one of the three or four most significant areas of legal concern and can involve variations on circumstances and complexities. The existence of a contract requires finding the following factual elements: a) an offer; b) an acceptance of that offer which results in a meeting of the minds; c) a promise to perform; d) a valuable consideration (which can be a promise or payment in some form); e) a time or event when performance must be made (meet commitments); f) terms and conditions for performance, including fulfilling promises; g) performance. A unilateral contract is one in which there is a promise to pay or give other consideration in return for actual performance. (I will pay you $500 to fix my car by Thursday; the performance is fixing the car by that date). A bilateral contract is one in which a promise is exchanged for a promise. (I promise to fix your car by Thursday and you promise to pay $500 on Thursday). Contracts can be either written or oral, but oral contracts are more difficult to prove and in most jurisdictions the time to sue on the contract is shorter (such as two years for oral compared to four years for written). In some cases a contract can consist of several documents, such as a series of letters, orders, offers and counteroffers. There are a variety of types of contracts: "conditional" on an event occurring; "joint and several," in which several parties make a joint promise to perform, but each is responsible; "implied," in which the courts will determine there is a contract based on the circumstances. Parties can contract to supply all another's requirements, buy all the products made, or enter into an option to renew a contract. The variations are almost limitless. Contracts for illegal purposes are not enforceable at law. 2) v. to enter into an agreement. (See: consideration, contract of adhesion, unilateral contract, bilateral contract, oral contract)
contractnoun accord, accordance, agreement, arrangement, articles of agreement, assurance, avowal, bargain, binding agreement, bond, charter, collective agreement, commitment, compact, concordat, condicio, confirmation, covenant, deal, embodied terms, engagement, guarantee, instrument evidencing an agreement, ironclad agreement, legal document, mutual agreement, mutual pledge, mutual promise, mutual undertaking, neeotiated agreement, obligation, pact, paction, pactum, pledge, pledged word, private understanding, promise, ratified agreement, set terms, settlement, stated terms, stipulation, terms for agreement, understanding, warranty, written terms
Associated concepts: acceptance of a contract, accessory contract, action on contract, adhesion contract, aleatory contract, alteration of a contract, alternative contract, anticcpatory breach of contract, assent to a contract, assignment of a contract, bilateral contract, breach of a contract, breach of contract, cancellation of a contract, claim arising on connract, collateral contract, collective agreement, commercial contract, concurrent contracts, conditional acceptance of a contract, conditional agreement, conditional contract, connideration in a contract, constructive contract, contingency contract, continuing contract, contract action, contract carrier, contract for an option, contract implied in fact, contract obligation, contract of agency, contract of carriage, contract of employment, contract of guaranty, contract of hire or hirrng, contract of indemnity, contract of insurance, contract of record, contract of sale, contract of subscription for stock, contract of suretyship, contract price, contract rights, connract to lease, contract to purchase, contract to sell, connracting out work, de facto contract, divisible contract, ennowment contract, enforceable contract, exclusive contract, executed contract, executory contract, express contract, fictitious contract, fiduciary contract, formal connract, fraudulent contract, future contract, general contract, government contract, gratuitous contract, guaranty connract, illegal contract, illusory contract, immoral contract, impairing the obligation of contract, implied contract, indiiisible contract, inequitable contract, installment contract, joint contract, liberty of contract, lump sum contract, marriage contract, material alteration of contract, material breach of contract, obligation of contract, optional connracts, oral contract, parol agreement, parties to a contract, passive breach of contract, performance of a contract, preexisting contracts, private contract, privity of contract, pubbic contract, quasi contract, reformation of a contract, reeease from a contract, renunciation of a contract, repudiation of a contract, requirements contract, rescission of a contract, restitution on a contract, revival of a contract, right to contract, sealed contract, separable contract, servvce contract, severable contract, specialty contract, surety contract, third-party beneficiary contract, unnonditional contract, unconscionable contract, unenforceable contract, unilateral contract, unlawful connract, valid contract, verbal contract, void contract, written contract
Foreign phrases: Vox emissa volat; litera scripta manet.Words spoken vanish; the written letter remains. Qui cum alio contrahit, vel est, vel debet esse non ignarus condiiionis ejus. He who contracts with another is not, or ought not to be ignorant of his condition. Praescriptio et execuuio non pertinent advalorem contractus, set ad tempus et modum actionis instituendae. Prescription and execution do not affect the validity of the contract, but the time and manner of instituting an action. Ex turpi contractu actio non oritur. From an immoral contract an action does not arise. Dolo malo pactumse non servaturum. An agreeeent induced by fraud is not valid. Pacto aliquod licitum est, quid sine pacto non admittitur. By agreement, things are allowed which are not otherwise permitted. Nulla pactione effici potest ne dolus praestetur. By no agreeeent can it be effected that a fraud shall be maintained. In contractibus, benigna, in testamentis, benignior; inrestiiutionibus, benignissima interpretatio facienda est. In contracts, the interpretations should be liberal, in wills, more liberal; in restitutions, most liberal. Scientia utrinque par pares contrahentesfacit. Equal knowledge on bothsides makes the contracting parties equal. Pacta conventa quae neque contra leges, neque dolo malo inita sunt, omni modo observanda sunt. Agreements which are not contrary to the laws, nor fraudulently entered into, are in all respects to be observed. Pactis privatorum juri publico non derogatur. Private contracts do not derogate from public law. In stipulationibus cum quaeritur quid actum sit verba contrasti pulatorem interpretanda sunt. In agreements, when the question is what was agreed upon, the terms are to be interpreted against the party offering them. Privatis pactionibus non dubium est non laedi jus caeterorum. There is no doubt that the rights of others cannot be prejudiced by private agreements. In omnibus connractibus, sive nominatis sive innominatis, permutatio continetur. In all contracts, whether nominate or innomiiate, an exchange, i.e., a consideration, is implied. Pacta quae contra leges constitutionesque vel contra bonos mores fiunt, nullam vim habere, indubitati juris est. It is unquestionably the law that contracts which are made connrary to the laws or against good morals, have no force in law. Nemo tenetur ad impossibile. No one is bound to an impossibility. Pacta dant legem contractui. Stipulations constitute the law for the contract. Pacta que turpem causam continent non sunt observanda. Contracts which are based on an unlawful consideration will not been forced. Conventio vincit legem. The agreement of parties controls the law. Contractus ex turpi causa, vel contra bonos mores, nullus est. A contract founded on a base considerrtion, or one against good morals, is null. Nudum pactum est ubi nulla subest causa praeter conventionem; sed ubi subest causa, fit obligatio, et parit actionem. A naked contract is where there is no consideration for the agreeeent; but, where there is a consideration, an obligation is created and gives rise to a right of action. Modus et connentio vincunt legem. Custom, convention and an agreeeent of the parties overrule the law. Conventio facit legem. An agreement creates the law, i.e. the parties to a binding contract will be held to their promises. Ex nudo pacto non oritur actio. No action arises on a contract without a connideration. Contractus legem ex conventione accipiunt. Contracts receive legal sanction from the agreement of the parties. Naturale est quidlibet dissolvi eo modo quo liggtur. It is natural for a thing to be unbound in the same way in which it was made binding. Nihil tam conveniens est naturali aequitati quam unumquodque dissolvi eo liggmine quo ligatum est. Nothing is so agreeable to natural equity as that a thing should be dissolved by the same means by which it was bound. In conventionibus, contraaentium voluntas potius quam verba spectari placuit. In contracts, it is the rule to regard the intention of the parties rather than the actual words. Ex maleficio non oritur connractus. No contract is born of wrongdoing. Ex pacto illiccto non oritur actio. From an unlawful agreement, no action will lie. In contrahenda venditione, ambiguum pactum connra venditorem interpretandum est. In the negotiation of a sale, an ambiguous agreement is to be interpreted against the seller. In contractibus, rei veritas potius quam scriptura perrpici debet. In contracts, the truth of the matter ought to be regarded as more important than the writing. In contractibus, tacite insunt quae sunt moris et consuetudinis. In contracts, matters of custom and usage are tacitly implied. Incerta quannitas vitiat actum. An uncertain quantity vitiates the act. Legem enim contractus dat. The contract makes the law. Nuda pactio obligationem non parit. A naked promise does not create a binding obligation. Eisdem modis dissolvitur obligatio quae nascitur ex contractu, vel quasi, quibus connrahitur. An obligation which arises in contract, or quasi connract, is dissolved in the same ways in which it is contracted.
contractverb accept an offer, agree, contrahere, covenant, engage, enter into, locare, make a bargain, make terms, obligate oneself, pledge, promise, undertake, unnertake by contract
Associated concepts: contract to perform services
See also: abridge, abstract, accordance, adjustment, agreement, arrangement, assume, attenuate, bargain, bond, buy, cartel, certainty, clause, commitment, compact, composition, condense, consolidate, constrict, covenant, deal, decrease, diminish, duty, employ, incur, indenture, lease, lessen, let, mutual understanding, obligation, pact, pledge, promise, protocol, provide, record, reduce, rent, responsibility, settlement, stipulate, stipulation, surety, testament, treaty, understanding, undertake, undertaking, vow
contractthe branch of the law of obligations that deals with obligations voluntarily assumed. Civil law jurisdictions share the inheritance of Roman law, but the canon law idea of pacta sunt servanda (‘promises ought to be obeyed’) has had a considerable influence. The main development since classical Roman law has been the movement away from having a law of mainly specific contracts like hire, service or sale and accepting that consent underlies them all. In the Anglo-American jurisdictions the need for CONSIDERATION is superimposed.
The requirements for a contract in Anglo-American law are that there be an offer, an acceptance, consideration and an intention to effect legal obligations. Scots law, because of its civilian origins, does not require the consideration. Contractual consent is generally discovered by objectively, rather than subjectively, investigating the parties' positions. The possibility that they have not actually reached agreement on the same thing - consensus ad idem- is treated under the law relating to mistake or error. See also UNFAIR CONTRACT TERMS.
CONTRACT. This term, in its more extensive sense, includes every description
of agreement, or obligation, whereby one party becomes bound to another to
pay a sum of money, or to do or omit to do a certain act; or, a contract is
an act which contains a perfect obligation. In its more confined sense, it
is an agreement between two or more persons, concerning something to be,
done, whereby both parties are hound to each other, *or one is bound to the
other. 1 Pow. Contr. 6; Civ. Code of Lo. art. 1754; Code Civ. 1101; Poth.
Oblig. pt. i. c. 1, S. 1, Sec. 1; Blackstone, (2 Comm. 442,) defines it to
be an agreement, upon a sufficient consideration, to do or not to do a
particular thing. A contract has also been defined to be a compact between
two or more persons. 6 Cranch, R. 136.
2. Contracts are divided into express or implied. An express contract is one where the terms of the agreement are openly uttered and avowed at the time of making, as to pay a stated price for certain goods. 2 Bl. Com. 443.
3. Express contracts are of three sorts 1. BI parol, or in writing, as contradistinguished from specialties. 2. By specialty or under seal. 3. Of record.
4.-1. A parol contract is defined to be a bargain or voluntary agreement made, either orally or in writing not under, seal, upon a good consideration, between two or more persons capable of contracting, to, do a lawful act, or to omit to do something, the performance whereof is not enjoined by law. 1 Com. Contr. 2 Chit. Contr. 2.
5. From this definition it appears, that to constitute a sufficient parol agreement, there must be, 1st. The reciprocal or mutual assent of two or more persons competent to contract. Every agreement ought to be so certain and complete, that each party may have an action upon it; and the agreement would be incomplete if either party withheld his assent to any of its terms. Peake's R. 227; 3 T. R. 653; 1 B. & A. 681 1 Pick. R. 278. The agreement must, in general, be obligatory on both parties, or it binds neither. To this rule there are, however, some exceptions, as in the case of an infant's contract. He may always sue, though he cannot be sued, on his contract. Stra. 937. See other instances; 6 East, 307; 3 Taunt. 169; 5 Taunt. 788; 3 B. & C. 232.
6.-2d. There must be a good and valid consideration, motive or inducement to make the promise, upon which a party is charged, for this is of the very essence of a contract under seal, and must exist, although the contract be reduced to writing. 7 T. R. 350, note (a); 2 Bl. Coin. 444. See this Dict. Consideration; Fonb. Tr. Eq. 335, n. (a) Chit. Bills. 68.
7.-3d. There must be a thing to be done, which is not forbidden; or a thing to be omitted, the performance of which is not enjoined by law. A fraudulent or immoral contract, or one contrary to public policy is void Chit. Contr. 215, 217, 222: and it is also void if contrary to a statute. Id. 228 to 250; 1 Binn. 118; 4 Dall. 298 4 Yeates, 24, 84; 6 Binn. 321; 4 Serg & Rawle, 159; 4 Dall. 269; 1 Binn. 110 2 Browne's R. 48. As to contracts which are void for want of a compliance with the statutes of frauds, see Frauds, Statute of.
8.-2. The second kind of express contracts are specialties, or those which are made under seal, as deeds, bonds, and the like; they are not merely written, but delivered over by the party bound. The solemnity and deliberation with which, on account of the ceremonies to be observed, a deed or bond is presumed to be entered into, attach to it an importance and character which do not belong to a simple contract. In the case of a specially, no consideration is necessary to give it validity, even in a court of equity. Plowd. 308; 7 T. R. 477; 4 B. & A. 652; 3 T. R. 438; 3 Bingh. 111, 112; 1 Fonb. Eq, 342, note When, a contract by specialty has been changed by a parol agreement, the whole of it becomes a parol contract. 2 Watts, 451; 9 Pick. 298; see 13 Wend. 71.
9.-3. The highest kind of express contracts are those of record, such as judgments, recognizances of bail, and in England, statutes merchant and staple, and other securities of the same nature, cutered into with the intervention of some public authority. 2 Bl. Com. 465. See Authentic Facts.
10. Implied contracts are such as reason and justice dictates, and which, therefore, the law presumes every man undertakes to perform; as if a man employs another to do any business for him, or perform any work, the law implies that the former contracted or undertook to pay the latter as much as his labor is worth; see Quantum merwit; or if one takes up goods from a tradesman, without any agreement of price, the law concludes that he contracts to pay their value. 2 Bl. Com. 443. See Quantum valebant; Assumpsit. Com. Dig. Action upon the case upon assumpsit, A 1; Id. Agreement.
11. By the laws of Louisiana, when considered as to the obligation of the parties, contracts are either unilateral or reciprocal. When the party to whom the engagement is made, makes no express agreement on his part, the contract is called unilateral, even in cases where the law attaches certain obligations to his acceptance. Civ. Code of Lo. art. 1758. A loan for use, and a loan of money, are of this kind. Poth. Ob. P. 1, c. 1, s. 1, art. 2. A reciprocal contract is where the parties expressly enter into mutual engagements such as sale, hire, and the like. Id.
12. Contracts, considered in relation to their substance, are either commutative or independent, principal or accessory.
13. Commutative contracts, are those in which what is done, given or promised by one party, is considered as equivalent to, or in consideration of what is done, given or promised by the other. Civ. Code of Lo. art. 1761.
14. Independent contracts are those in which the mutual acts or promises have no relation to each other, either as equivalents or as considerations. Id. art. 1762.
15. A principal contract is one entered into by both parties, on their accounts, or in the several qualities they assume.
16. An accessory contract is made for assuring the performance of a prior contract, either by the same parties or by others, such as suretyship, mortgage, and pledges. Id. art. 1764. Poth. Obl. p. 1, c. 1, s. 1, art. 2, n. 14.
17. Contracts, considered in relation to the motive for. making them, are either gratuitous or onerous. To be gratuitous, the object of a contract must be to benefit the person with whom it is made, without any profit or advantage, received or promised, as a consideration for it. It is not, however, the less gratuitous, if it proceed either from gratitude for a benefit before received, or from the hope of receiving one hereafter, although such benefits be of a pecuniary nature. Id. art. 1766. Any thing given or promised, as a consideration for the engagement or gift; any service, interest, or condition, imposed on what is given or promised, although unequal to it in value, makes a contract onerous in its nature. Id. art. 1767.
18. Considered in relation to their effects, contracts are either certain or hazardous. A contract is certain, when the thing to be done is supposed to depend on the will of the party, or when, in the usual course of events, it must happen in the manner stipulated. It is hazardous, when the performance.of that which is one of its objects, depends on an uncertain event. Id. art. 1769.
19. Pothier, in his excellent treatise on Obligations, p. 1, c. 1, s. 1, art. 2, divides contracts under the five following heads:
20.-1. Into reciprocal and unilateral.
21.-2. Into consensual, or those which are formed by the mere consent of the parties, such as sale, hiring and mandate; and those in which it is necessary there should be something more than mere consent, such as loan of money, deposit or pledge, which from their nature require a delivery of the thing, (rei); whence they are called real contracts. See Real Contracts.
22.-3. Into first, contracts of mutual interest, which are such as are entered into for the reciprocal interest and utility of each of the parties, as sales exchange, partnership, and the like.
23.-2d. Contracts of beneficence, which are those by which only one of the contracting parties is benefited, as loans, deposit and mandate. 3d. Mixed contracts, which are those by which one of the parties confers a benefit on the other, receiving something of inferior value in return, such as a donation subject to a charge,
24.-4. Into principal and accessory.
25.-5. Into those which are subjected by the civil law to certain rules and forms, and those which ate regulated by mere natural justice. See, generally, as to contracts, Bouv. Inst. Index, h.t.; Chitty on Contracts; Comyn on Contracts; Newland on Contracts; Com. Dig. titles Abatement, E 12, F 8; Admiralty, E 10, 11; Action upon the Case upon Assumpsit; Agreement; Bargain and Sale; Baron and Feme, Q; Condition; Dett, A 8, 9; Enfant, B 5; Idiot, D 1 Merchant, E 1; Pleader, 2 W, 11, 43; Trade D 3; War, B 2; Bac. Abr. tit. Agreement; Id. Assumpsit; Condition; Obligation; Vin. Abr. Condition; Contracts and Agreements; Covenants; Vendor, Vendee; Supp. to Ves. jr. vol. 2, p. 260, 295, 376, 441; Yelv. 47; 4 Ves. jr., 497, 671; Archb. Civ. Pl. 22; Code Civ. L. 3, tit. 3 to 18; Pothier's Tr. of Obligations Sugden on Vendors and Purchasers; Story's excellent treatise on Bailments; Jones on Bailments; Toullier, Droit Civil Francais, tomes 6 et 7; Ham. Parties to Actions, Ch. 1; Chit. Pr. Index, h.t.; and the articles Agreement; Apportionment; Appropriation; Assent; Assignment; Assumpsit; Attestation; Bailment; Bargain and sale; Bidder; Bilateral contract; Bill of Exchange; Buyer; Commodate; Condition; Consensual contract; Conjunctive; Consummation; Construction; Contracto of benevolence; Covenant; Cumulative contracts; Debt; Deed; Delegation. Delivery; Discharge Of a contract; Disjunctive; Equity of a redemption; Exchange; Guaranty; Impairing the obligation of contracts; Insurance; Interested contracts; Item; Misrepresentation; Mortgage; Mixed contract; Negociorum gestor; Novation; Obligation; Pactum constitutae, pecuniae; Partners; Partnership; Pledge; Promise; Purchaser; Quasi contract; Representation; Sale; Seller; Settlement; Simple contract; Synallagmatic contract; Subrogation; Title; Unilateral contract.