2. Contract Contracts are agreements between two or more parties that create obligations. Characteristics of Contracts Valid, void, voidable or unenforceable Express or implied Bilateral or Unilateral Oral or written

3. Valid, Void, Voidable, Unenforceable Contracts Valid contract is legally binding Voided contract has no force behind it Voidable contract is one that can be cancelled. Unenforceable means it cannot be enforced in a court of law.

4. Express or Implied Express contract is a written contract or one that is orally executed. Real estate agreements Work contract Implied contract is one that comes about through the actions of other parties. Ex: Buying gas without talking to the attendant simply because it is self service. Customer pays for gas and attendant turns on the pumps.

5. Bilateral or Unilateral Bilateral Contracts A promise is made by both parties I promise to sell you my house if you promise you will buy it. Unilateral Contracts A promise is only made on one side I’ll sell you my computer for $150.00 if you give me the money tomorrow by 5:00. If the money is delivered on time, the contract takes effect.

6. Oral and Written Oral Contracts Created by word or mouth Written Contracts These have the terms spelled out in a specific manner. These are easily enforceable.

7. Contracts Require To be legally enforceable contracts require a valid offer and acceptance, genuine agreement, legality, consideration, and capacity. Some contracts must be placed in writing.

8. Parties The party making the offer is the offeror. The party accepting the offer is the offeree.

9. An offer must… Be made with the offeror’s apparent intention to be bound by it. Be complete and definite. Be communicated to the offeree

10. Offer is ended by… By revocation of the offeror At the time stated in the offer At the end of a reasonable time if no time is stated By rejection of the offeree By counteroffer By death or insanity of either of the parties By destruction of the specific matter.

11. Open Offers In general, an offeror is not obliged to keep an offer open for a specific time even if the offeror has promised to do so.

12. Option The offeree may give the offeror something of value in return for a promise to keep the offer open. This is called an option.

13. Firm Offer A firm offer, made between two merchants, is an offer that contains a term stating how long the offer is to stay open.

14. Contracts used for sale In contracts for the sale of services or realty, the offeree must accept the offer unconditionally and in the exact form and manner indicated by the offeror. In contracts for the sale of goods, acceptances can vary the terms of offer.

15. Contractual Communication Contractual communication is effected by a constantly increasing variety of means to include phone, fax, e-mail, face-to-face negotiations, ground mail, and hand signals. Although most contractual communications are effective when received, acceptances are generally effective when sent.

16. Never sign a contract unless you have thoroughly read it. If you do not understand the legal terminology, ask for assistance. Contracts are very hard to void if you have already signed them. You must prove duress or the inability to understand.