5.1 1.1 Law for Business, 15e by Ashcroft Chapter 5: Nature and Classes of Contracts Law for Business, 15e, by Ashcroft, © 2005 West Legal Studies in Business, a Division of Thomson Learning 5.2 Chapter 5 Objectives State the five requirements for a valid contract. Describe the types of contracts and how they differ from agreements. Explain the difference between a contract and a quasi contract. 5.3 Contracts A contract can be defined as a legally A breach of contract is the failure of enforceable agreement between two or more competent persons. one of the parties to perform the obligations assumed under the contract. 5.4 Requirements of a Valid Contracts Based on a mutual agreement by the parties Made by competent parties Supported by consideration given by each party to the contract. Be for a lawful purpose Sometimes meet certain formal requirements 5.5 Void and Voidable Contracts A void contract is an agreement with no legal effect It is not enforceable in court. It is not the same as an unenforceable contract. A voidable contract would be an enforceable agreement, but, because of circumstances, one or both parties may elect to void it 5.6 Types of Contracts Express and implied Formal and simple Unilateral and bilateral Executory and executed Quasi contract Quick Quiz 5.7 Contracts: True or False A valid contract can be oral as well as written. A formal contract is created in a particular form. An executory contract has been fully performed by all parties. Most contracts provide a clause in which one party can receive unjust enrichment. Quick Quiz 5.8 Contracts: True or False (answers) A valid contract can be oral as well as written. - True A formal contract is created in a particular form. - True An executory contract has been fully performed by all parties. - False Most contracts provide a clause in which one party can receive unjust enrichment. - False 5.9 1.9 Have any questions? Be sure you study the cases in the textbook for a thorough understanding of this chapter.