Parties to a Contract
Promisor
(Obligor)
Promisee
(Obligee)
General Parties to a Contract
Insurer
Shipper
Insured
Parties to a Transportation Contract
Parties to an Insurance Policy
Landlord
(Lessor)
Tenant
(Lessee)
Parties Agreeing Upon Occupation
of a Building for Money (a Lease)
Carrier
Parties May Be:
Individuals
Partnerships
Corporations
Governments
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Vendor
Vendee
Parties to a Sales Contract
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Classes of Contracts
INFORMAL
FORMAL
contract under seal,
contracts of record,
negotiable instruments
all other contracts
IMPLIED
EXPRESS
spoken or written words
VALID
binding and
enforceable
created by law based on
acts or conduct of parties
VOIDABLE
circumstances surrounding
execution or lack of capacity
allows rejection at option of one party
EXECUTED
completely performed
BILATERAL
one promise
given in exchange
for another
VOID
without legal
effect
EXECUTOR
Y remains to be done
something
UNILATERAL
only one party is obligated to
perform after contract formation
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VOID
gives a right to one
party to enter into a second
contract at a later date
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Types of Contracts
Express
Implied
Written or orally stated
No express agreement services rendered
Valid
In compliance with the laws of formation and subject matter
Voidable
Execution or capacity issues in formation
Void
Illegal subject matter incapacity (declared insane) of a party
Executed
Promises performed
Executory
Contract negotiated and signed but not performed
Bilateral
Promise for a promise
Unilateral
Promise for a performance
Option
Separate contract to have a offer held open
Quasi
Contract
Right to recovery under implied contract to prevent unjust enrichment
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Contractual Liability
Intent
Intent
Offer
Acceptance
Communication
Communication
Unjust Enrichment
No Contract
Avoided Contract
Void Agreement
Quasi Contract
Contract
Express
Formal
Executory
Bilateral
Implied
Informal
Executed
Unilateral
Option
First Refusal
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Contract
Parties
This contract is executed between the Lookout Alarm system, herein called
System, of 276 West Jackson Street, Phoenix, Arizona, and A.J. Armstrong,
herein called Homeowner, of 737 Inwood Drive, Phoenix, Arizona
Installation System agrees to install a burglar alarm system at the above address of the
homeowner, in accordance with the specifications that are attached hereto.
Payment
Homeowner agrees to pay System for the above installation the sum of
$4,863.00, $663.00 being paid upon execution of this contract and the
balance of $4,200.00 being paid within 90 days following satisfactory
completion of the work by System.
}
}
}
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A.J. Armstrong
Lookout Alarm System
by S.J. McRory
A.J. Armstrong
S.J. McRory, President
July 1, 2001
July 1, 2001
Date
Date
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Chapter 11 Summary
A contract is a binding agreement between
two or more parties. A contract arises when an
offer is accepted with contractual intent (the
intent to make a binding agreement).
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Chapter 11 Summary (cont.)
Contracts may be classified in a number
of ways according to form, the way in which
they were created, validity, and obligations.
With respect to form, a contract may be either
informal or formal, such as those under seal or
those appearing on the records of courts or
administrative agencies.
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Chapter 11 Summary (cont.)
Contracts may be classified by the way they
were created as those that are expressed by
words—written or oral—and those that are
implied or deduced from conduct. The
question of validity requires distinguishing
between contracts that are valid; those that are
voidable; and those that are not contracts at all
but are merely void agreements.
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Chapter 11 Summary (cont.)
Contracts can be distinguished on the basis of
the obligations created as executed contracts,
in which everything has been performed, and
executory contracts, in which something
remains to be done. The bilateral contract is
formed by exchanging a promise for a
promise, so each party has the obligation of
thereafter rendering the promised
performance.
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Chapter 11 Summary (cont.)
In the unilateral contract, which is the doing
of an act in exchange for a promise, no further
performance is required of the offeree who
performed the act. The only obligation is that
of the promisor.
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Chapter 11 Summary (cont.)
In certain situations, the law regards it as
unjust for a person to receive a benefit and not
pay for it. In such a case, the law of quasi
contracts allows the performing person to
recover the reasonable value of the benefit
conferred on the benefited person even though
no contract between them requires any
payment.
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Chapter 11 Summary (cont.)
Unjust enrichment, which a quasi contract is
designed to prevent, sometimes arises when
there was never any contract between the
persons involved or when there was a
contract, but for some reason it was avoided
or held to be merely a void agreement. Quasicontractual recovery is not allowed merely
because someone loses money.
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