He examines the differences between implied and express contracts, unilateral and bilateral contracts as well as void and voidable contracts. He also shows the key elements in the formation of a legally binding contract and examples of valid consideration. Implied contracts are one that are not stated clearly, while express contracts are ones that are clearly stated and understood. An example of an implied contract would be, if you take your pet to the veterinarian and they perform surgery or an examination, you would expect them to perform to the best of their ability and they would expect you to pay for that service.
Unilateral and bilateral contracts are different because of the amount of parties involved in the contract, meaning unilateral is a one sided contract, while bilateral contracts have multiple parties involved. Void and voidable have a few differences and they include; one is invalid at the time of creation, while the other is valid unless it is cancelled by one party. Another would be a void contract is nonexistent while the other exists and bound by at least one party involved in the contract.
The key elements in the formation of a legally binding contract are, offer, acceptance, consideration, mutual obligation, and competency & capacity. Some examples of valid consideration for a contract would be; money, property, goods, and services. Throughout the course of this paper I will be examining the differences between implied and express contracts, unilateral and bilateral contracts, and void and voidable contracts. I will also be discussing the elements involved in the formation of a contract as well as examples of valid consideration.
In this first section, I will be examining the differences between implied and express contracts, unilateral and bilateral contracts, and void and voidable contracts. Express contracts consist of agreements in which the terms are stated by the parties. The terms may be stated orally or in writing. But the contract as a whole must reflect the intention of the parties. (Legal, 2010-2013) An example of an express contract would be when you buy a car, where all terms are stated clearly in the paperwork and are signed by both parties. An implied contract is one in which the agreement is not clearly stated orally or written.
For example, when you take your pet to the veterinarian and he or she performs surgery or an examination, you expect them to perform to their best ability as well as they expect you to pay for the service performed. So the main difference is, while one is clearly stated the other is not clearly stated. Now let’s look at the differences between bilateral and unilateral contracts. A bilateral contract is an agreement between 2 or more people or groups. Most people enter into bilateral contracts every day throughout their life, for example, purchases from favorite store, treatment from your doctor, and ordering a meal at a restaurant.
A unilateral contract involves actions by one person or a group. An example of a unilateral contract is, you post a reward for a lost pet in the newspaper or online offering that reward, you promise to pay if the pet is found. So the differences are the amount of parties involved in the contracts, unilateral is a promise to pay while bilateral requires an up-front exchange of money. Next let’s take a look at the differences between a void contract and voidable contract. A void contract is a document that is considered to never have met the requirements to become a valid contract under the law and cannot be enforced.
A voidable contract is a legal document in which there is a defect, and then may be voided by one of the parties. (Board, 2012) The differences between them are; a void contract becomes invalid at the time of its creation, a voidable contract only becomes invalid if it is cancelled by one of the two parties who are engaged in the contract. Also, a void contract is nonexistent and cannot be upheld by any law, while voidable contracts are existing contracts, and is bound by at least one party involved in the contract. Difference, 2013) The next section includes the elements involved in the formation of a contract.
The elements that must be established to demonstrate the formation of a legally binding contract are; offer, acceptance, consideration, mutuality of obligation, and competency and capacity. Making an offer is the first step of the contract process, and it is a promise to act or refrain from acting, which is made in exchange for a return promise to do the same thing. Some offers anticipate not another promise being returned in exchange but the performance of an act or forbearance from taking action.
Acceptance of the offer is the second step in the contract process, and it is the acceptance of the terms clearly stated by the offeror. If no manner of acceptance is specified, the acceptance may be made under reasonable circumstances. The next step is consideration. Consideration is the act of each party providing something of value to tempt the other to enter into the agreement. The value of exchange doesn’t have to be currency. Instead it may be a promise to perform an act that one is not legally required to do.
Mutuality of obligation is the next step and it is a doctrine that states both parties must be bound to perform their obligations or the law will treat the agreement as if neither party is bound to perform. (Legal, 2010-2013) Lastly, competency and capacity is the final step in the contract formation process. A natural person who enters a contract possesses complete legal capacity to be held liable for the duties he or she agrees to undertake, unless the person is a minor, mentally incapacitated, or intoxicated. (Legal, 2010-2013) The last section of this paper shows three examples of valid consideration.
There are a few examples of valid consideration and they are; money, property or goods, and services. Money is the most common example of valid consideration in a contract. The exchange of property or goods is another example of valid consideration. Examples of goods would be a television, car, or other valuable goods. Property such as a house or land would be another form to entice the other party into a contract. Seeing as those have significant value or even future value would seriously entice someone into entering a contract with the other party depending on the offer. Even barter agreements are sufficient for consideration.
Providing a service is another form of valid consideration as part of a contract. This may range from professional service, day care, or practically any other service in which the party is paid for the service. There are other forms of valid consideration as well but these are just some of the examples under the terms of a contract. In conclusion, now you can see the differences between implied and express contracts, unilateral and bilateral contracts, as well as void and voidable contracts. You can also see what elements are required in the formation of a legally binding contract and the examples of valid consideration.