Contract

The Definition of a Contract
A contract is “a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.”3
Put simply, a contract is a legally binding agreement between two or more parties who agree to perform or to refrain from performing some act now or in the future. Generally, contract disputes arise when there is a promise of future performance.
In contract law, intent is determined by what is called the objective theory of contracts, The theory is that a party’s intention to enter into a legally binding agreement, or contract, is judged by outward, objective facts as interpreted by a reasonable person,
Implied Contract Requirements. For an implied contract to arise, certain requirements must be met.
Normally, if the following conditions exist, a court will hold that an implied contract was formed:
1. The plaintiff furnished some service or property.
2. The plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected.
3. The defendant had a chance to reject the services or property and did not.
Requirements of the Offer
1. The offeror must have a serious intention to become bound by the offer.
2. The terms of the offer must be reasonably certain, or defi nite, so that the parties and the court can ascertain the terms of the contract.
3. The offer must be communicated to the offeree.
Serious intent is not determined by the subjective intentions, beliefs, and assumptions of the offeror.
Rather, it is determined by what a reasonable person in the offeree’s position would conclude that the offeror’s words and actions meant.
DEFINITENESS OF TERMS
1. The identifi cation of the parties.
2. The identifi cation of the object or subject matter of the contract (also the quantity, when appropriate), including the work to be performed, with specifi c identifi cation of such items as goods, services, and land.
3. The consideration to be paid.
4. The time of payment, delivery, or performance.
An option contract is created when an offeror promises to hold an offer open for a specifi ed period of time in return for a payment
(consideration) given by the offeree. An option contract takes away the offeror’s power to revoke the offer for the period of time specifi ed in the option.
TERMINATION BY OPERATION OF LAW The power of the offeree to transform the offer into a binding, legal obligation can be terminated by operation of law through the occurrence of any of the following events: 1. Lapse of time.
2. Destruction of the specifi c subject matter of the offer. 3. Death or incompetence of the offeror or the offeree. 4. Supervening illegality of the proposed contract.
Authorized Means of Acceptance. A means of communicating acceptance can be expressly authorized by the offeror or impliedly authorized by the facts and circumstances surrounding the situation or by law.16 An acceptance sent by means not expressly or impliedly authorized normally is not effective until it is received by the offeror.
If the offeror does not expressly authorize a certain mode of acceptance, then acceptance can be made by any reasonable means.
Substitute Method of Acceptance. If the offeror authorizes a particular method of acceptance, but the offeree accepts by a different means, the acceptance may still be effective if the substituted method serves the same purpose as the authorized means.
The acceptance is not effective on dispatch, though, and no contract will be formed until the acceptance is received by the offeror. consideration is broken down into two parts: (1) something of legally suffi cient value must be given in exchange for the promise, and (2) usually, there must be a bargained-for exchange.
Consideration usually is defi ned as the value (such as cash) given in return for a promise (in a bilateral