Definition of a Contract

A contract may be defined as a legally binding agreement between individuals or between a state and individual. This means that the agreement generates rights and obligations.

Contracts are classified into “contracts by deed” and “simple contracts”. The contract by deed must be in writing and must be signed, witnessed, and delivered. All other contracts may be classified as simple contracts, they are made in writing, orally or by conduct. Another way of classifying contracts is according to whether they are “bilateral” or “unilateral”.

There are three basic elements in the formation of a valid contract. First, the parties must have reached agreement (offer and acceptance); secondly, they must intend to be legally bound; and thirdly, both parties must have provided valuable consideration.

Today the courts recognize a contract as a promise that the parties to the contract must perform their obligations. So the courts may force persons to pay damages. Thus, contracts help strengthen the stability and reliability of the business system.

Task 1. Answer the questions:

What kind of agreement is a contract?
What is its function?
How can contracts be classified?
What are the three basic elements in the formation of a valid contract?
What do contracts serve for?

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<== попередня сторінка	\|	наступна сторінка ==>
Criminal Punishment	\|	Offer, Acceptance and Consideration

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