VALID
CONTRACT
Introduction to Business &
Marketing
Contract

Contract: “legally enforceable agreement between
two or more parties.”
 Contracts



can be:
Written
Verbal
Handshake
Four Elements Of A Valid Contract
 Four Elements:
1. Agreement – initial step in forming a contract
2.
Consideration – something of value exchanged
by each party
3.
Capacity- having the legal and mental ability to
enter into a binding contract
4.
Legality – subject matter of the contract must not
be against the law
Four Elements
Written v. Unwritten Contract
Written Contract:




Formal, easier to use as evidence
Clearly highlights guidelines, conditions, and
infractions of contract
Must be signed by all parties to become valid
Unwritten Contract:




Informal, becomes “my word v. your word”
Conditions are vague; speculation
Only becomes valid through recording or video
evidence
Examples Of Contracts

Lease – Property borrowed in exchange for money.
Payments made monthly – failure to pay = fines & loss of
property.

Credit Card – Agreement between you & the credit card
company. Minimum payment will be noted on bill.

Employment Agreement – Agreement between employer &
employee. Include salary, hours, dress code, and infractions
resulting in disciplinary actions.

Purchase Agreement (or receipt) – Agreement between
company & customer. Proof of a purchase and return
policy.
Sample Lease Agreement
Sample Credit Card Statement
Sample Employment Agreement
Sample Purchase Agreement
Violations of Contracts

Lawsuits

Eviction

Fines or enforcement of payment

Removal from company or workplace

Jail time
Scenarios

Nike Employment Agreement states that employees must wear
Nike apparel at all times. However, Eric shows up wearing Adidas
shoes. What could happen?

Part of the Employment Agreement states that all teachers must
be at work by 8:45am. However, Mr. T showed up at 9:08am this
entire week. What could happen to him?

The Wright family signed an apartment Lease that requires $1800
rent due on the 5th every month. Mr. Wright has been late paying
his rent for the past 2 months. If he is late for the 3rd month, what
could happen?

Deena received a Credit Card Statement showing a $50
payment due by April 30th. If it is not paid by then, what is the
punishment?
Class Activity

Complete the Matching Activity

Answer the following questions:
1. What is considered a valid contract?
2. What are the requirements of a valid
contract?
3. How can a valid contract be enforced?