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.