Abstract A contact is a legal binding agreement made between two parties. A contract is only enforceable if both parties involved in the contract have agreed to give or receive something of value. When going into an agreement or contract it is important to know the type of contract. This paper will explore the various types of contracts and the meaning of each. Express or implied contracts, unilateral and bilateral contracts and voidable contracts will be reviewed as well as an individual’s right when it comes to fulfilling your end of a contract. Valid Contracts.
The first thing to know is a contract is a legal binding agreement made between two parties. In order for a contract to be valid both parties that are involved must have agreed to give or receive something of value (Course Materials). An express contract is a contract that is either a written or verbal and is agreed upon and terms stated by the involved parties. An implied contract is an agreement or contract made by an act or conduct. For example if you ride the Subway you have to pay, you are not told every time you ride it is just implied and you pay. This is a non-formal contract that is not formally stated in words.
This type of contract is just as binding in a court of law as an express contract. Bilateral contract both parties involved are making promises (Course Materials). It is an exchange between both parties that they each perform some type of act. A unilateral contract is when one party is making a promise. This is a promise made by one of the parties and in exchange an act or performance made by the other party. It is an acceptance of an offer in return making a promise once such act is performed. In a unilateral exchange the contract or agreement can be revoked up until the time the performance is complete.
These are both contracts that can be be seen and carried out in a court of law and the court will determine the acts on how the parties entered into the contract. The courts will not decide on the type of the contract they will only hear evidence of the agreement and they do not enforce on side arguments. Once a valid contract is in place can it be void or voidable? Under certain circumstances a contract can become void. When a contract becomes void it means the contract never took place. When making an agreement you can void a contract if both parties agree to terminate the contract.
If you sign into a contract that does not meet the element for a valid contract that said contract will be void. A contract can also be void if it had a time limit and it has expired. A void contract is releasing each party from the binding agreement that was set into place. A voidable contract is a valid contract that should not remain valid due to the way it was formed (live chat). Misrepresentation, Fraud, undue influence, capacity, or a minor signing into a contract are all reasons for a voidable contract.
A void contract cannot be legally enforced and a voidable contract is one by law that becomes voidable. A contact cannot exist just because there is an agreement it needs to meet the requirement for a valid contract. Elements needed for a valid contracts are: 1. Offer and acceptance- This is when and offer is made and accepted by another party. 2. Intention to create legal relations-This is when the parties agree to enter into a legal binding agreement. 3. Consideration- Consideration is the price paid for the promise of the other party. This must be something of value but does not have to be money. 4. Legal capacity- Need to be of legal age, sound mind and no misrepresentation.
5. Consent-Must be entered into on their own free will and know what is expected of the contract. 6. Illegal and void contracts- A contract that was entered into under circumstances that did not meet the requirement for a valid contract. While a contract can be voidable or void there must be mistakes made upon the agreement for this to happen (The Law handbook). If a person signing into contract does not read the contract and signs this does not meet the requirements to have that contract void and the said party will be bound to fulfill the requirements of such contract.
A contract must have valid consideration, something of value or of a mutual exchange or performance that both parties contract into. As to not to get confused with valid consideration a promise to love someone and they love you back does not qualify for valid consideration. If you ask for a quote to have your carpets cleaned over the phone and the carpet company quotes you $100. 00 and you accept the offer you have just entered into a verbal contract or an express contract or a bilateral contract. This contract is not valid until the services are rendered.
The carpet cleaner will clean your carpet and in exchange for the service you will pay the $100. 00. If you do not pay the money the carpet company has a valid reason to take you to court for the services provided. If you have your child in day care you sign into a contract. The day care will provide you with quality care for your child with certain days listed that they are closed. There is a set price on the contract monthly and no discounts for the days they will be closed. You agree and sign the contract. This now becomes a legal binding contract. They provide you with a service and you pay for that service.
You cannot collect money back for the days they close and did not provide service because the expectations were clearly stated in the contract you signed and agreed to when signing into the contract. There was no misrepresentation so this will stand as a valid contract. The last example of a contract is if your 17 year old child goes to a car dealer gets a loan, signs all the contracts and comes home with a car. This now becomes a voidable contract. Since the person signing into the contract was a minor the contract can be voidable.
The car would have be returned but the minor would not be held responsible for any of the money’s owed or anything that was written in the contract. A legal contract is never a void contract but it can under certain circumstances become a voidable contract. What was previously an enforceable contract may become unenforceable if a law is passed after the contract was in place that now makes this contract illegal (The Law Handbook). Anyone signing into any type of contract should know exactly what is the expectations of the contract the terms need to be clear and acceptable to all parties involved in order to make it a successful contract. References Course Materials: BUSN150-1205A-02: Contracts and Privacy Issues.
Retrieved November 23, 2012 from https://mycampus. aiu-online. com/courses/BUSN150/u3/hub1/hub. html Editorial Board. (2012). Introduction to Business Law. Words of Wisdom, LLC Laws. com (n. d. ) Enforceable Contract at a Glance. Retrieved November 24, 2012 from http://contract-law. laws. com/enforcing-contracts Live Chat. Contracts Unit 3. Retrieved November 22, 2012 from AIU course materials at http://breeze. careeredonline. com/p96458035/? session=breezs48mhh2tmm55uus4 The Law Handbook (n. d. ) Your Practical Guide to the Law in Victoria. Retrieved November 23, 2012 from http://www. lawhandbook. org. au/handbook/ch12s01s02. php.