Contract in United States

Contract Definition

(Lat. contractus, from con, with, and traho, to draw). An agreement between two or more parties to do or not do a particular thing. Marshall, C. J., 4 Pet. (U.S.) 420, 572. An agreement in which a party undertakes to do or not to do a particular thing. Marshall, C. J. 4 Wheat. (U.S.) 197. An agreement between two or more parties for the doing or not doing of some specified thing. 1 Pars. Cent. 5, It has been variously defined as follows: A compact between two or more parties. 6 Cranch (U.S.) 87, 136. An agreement or covenant between two or more persons, in which each party binds himself to do or forbear some act, and each acquires a right to what the other promises. Enc. Amer.; Webster. A contract or agreement is where a promise is made on one side and assented to on the other; or where two or more persons enter into an engagement with each other by a promise on either side. 2 Steph. Comra. 108, 109. An agreement upon sufficient consideration to do or not to do a particular thing. 2 Bl. Comm. 446; 2 Kent, Comm. 449, A covenant or agreement between two parties with a lawful consideration or cause West. Symb. lib. 1, § 10; Cowell; Blount. A deliberate engagement between competent parties upon a legal consideration to do or to abstain from domg some act. Story, Cont. § 1. A mutual promise upon lawful consideration or cause which binds the parties to a performance. The writing which contains the agreement of parties with the terms and conditions, and which serves as a proof of the obligation. The last is a distinct signification. 2 Hill (N. Y.) 551. We have not included consideration in our definition of contract, because it does not seem to be essential to a contract, although it is necessary to its enforcement. See Consideration. Mr. Stephen, whose definition of contract is given above, thus criticizes the definition of Blackstone, which has been adopted by Chancellor Kent and other high authorities : First, that the word agreement itself requires definition as much as contract; second, that the existence of a consideration, though essential to the validity of a parol contract, forms propperly no part of the idea; third, that the definition takes no sufficient notice of the mutuality which properly distinguishes a contract from a promise. 2 Steph. Comm. 109. The use of the word agreement (aggregatio mentium) seems to have the authority of the best writers in ancient and modem times (see above) as a part of the definition of contract. It is probably a translation of the civil law conventio (con and venio), a coming together, to which (being derived from ad and grego) it seems nearly equivalent. We do not think the objection that it is a synonym (or nearly so) a valid one. Some word of the kind is necessary as a basis of the definition. No two sjmonyms convey precisely the same idea. Most of them have minute distinctions, says Reid. If two are entirely equivalent, it will soon be determined by accident which shall remain in use, and which become obsolete. To one who has no knowledge of a language, it is impossible to define any abstract idea; but to one who understands a language, an abstraction is defined by a synonym properly qualified. By pointing out distinctions and the mutual relations between synonyms, the object of definition is answered. Hence we do not thing Blackstone’s definition open to the first objection. As to the idea of consideration, Mr. Stephens seems correct, and to have the authority of some of the first legal minds of modern times. Consideration, however, may be necessary to enforce a contract, though not essential to the idea. Even in that class of contracts (by specialty) in which no consideration is in fact required, one is always presumed by law; the form of the instrument being held to import a consideration. 2 Kent, Comm. 450, note. A contract without consideration is called a nudum pactum (nude pact) , but it is still a pactum, and this implies that consideration is not an essential. The third objection of Mr. Stephen to the definition of Blackstone does not seem one to which it is fairly obnoxious. There is an idea of mutuality in con and traho, to draw together, but we think that mutuality is implied in agreement as well. An aggregatio mentium seems impossible without mutuality. Blackstone, in his analysis, appears to have regarded agreement as implying mutuality; for he defines it (2 Bl. Comm. 442) : A mutual bargain or convention. In our definition, however, all ambiguity is avoided by the use of the words betyreen two or more parties following agreement. In its widest sense, contract includes records and specialties; but this use as a general term for all sorts of obligations, though of too great authority to be now doubted, seems to be an undue extension of the propet meaning of the term, which is much more nearly equivalent to agreement, which is never applied to specialties. Mutuality is of the very essence of both, not only mutuality of assent, but of act. As expressed by Lord Coke, actus contra actum. 2 Coke, 15; 7 Man. & G. 998, argument, and note. This is illustrated in contracts of sale, bailment, hire, as well as partnership and marriage; and no other engagements but those with this kind of mutuality would seem properly to come under the head of contracts. In a bond there is none of this mutuality, no act to be done by the obligee to make the instrument binding. In a judgment there is no mutuality either of act or of assent. It is judicium redditum in invitum. It may properly be denied to be a contract, though Blackstone insists that one is implied. Per Mansfield, 3 Burrows, 1545; 1 Cow. (N. Y.) 316; per Story, J., 1 Mason (U.S.) 288. Mr. Chitty uses obligation as an alternative word of description when speaking of bonds and judgments. Chit. Cont. 2, 4. An act of legislature may be a contract. So may a legislative grant with exemption from taxes. 5 Ohio St. 361. So a charter is a contract between a state and a corporation, within the meaning of the constitution of the United States (article 1, § 10, cl. 1). 27 Miss. 417. See Obligation of Contracts.
(1) Accessory contracts are those made for assuring the performance of a prior contract, either by the same parties or by others, such as suretyship, mortgage, and pledges. Civ. Code La. art. 1764; Poth. Obi. pt. 1, c. 1, § 1; art. 2, note 14.
(2) Contracts of beneficence are those by which only one of the contracting parties is benefited; as loans, deposit, and mandate. Civ. Code La. art. 1767.
(3) Certain contracts are those in which the thing to be done is supposed to depend on the will of the party, or when, in the usual course of events, it must happen in the manner stipulated.
(4) Commutative contracts are those in which what is done, given, or promised by one party is considered as an equivalent to or in consideration of what is done, given, or promised by the other. Civ. Code La. art. 1761.
(5) Gratuitous contracts are those of which the object is the benefit of the person with whom it is made, without any profit or advantage received or promised as a consideration for it. It is not, however, the less gratuitous if it proceed either from gratitude for a benefit before received, or from the hope of receiving one hereafter, although such benefit be of a pecuniary nature. Civ. Code La..§ 1766.
(6) Hazardous contracts are those in which the performance of that which is one of its objects depends on an uncertain event. Civ. Code La. art. 1769.
(7) Consensual contracts are those which are formed by mere consent of the parties, such as all contracts of hiring and mandate.
(8) Executed contracts are those in which nothing remains to be done by either party and where the transaction has been completed, or was completed at the time the contract or agreement was made; as where an article is sold and delivered, and payment therefor is made on the spot.
(9) Executory contracts are those in which some act remains to be done; as when an agreement is made to build a house in six months, to do an act befo
re some future day, to lend money upon a certain interest payable at a future time, A contract executed (which differs in nothing from a grant) conveys a chose in possession; a contract executory conveys a chose in action. 2 Bl. Comm. 443. As to the importance of grants considered as contracts, see Obligation of Contracts.
(10) Express contracts are those in which the terms of the contract or agreement are openly and fully uttered and avowed at the time of making; as, to pay a stated price for certain specified goods; to deliver an ox, etc. 2 Bl. Comm. 443.
(11) Implied contracts are such as reason and justice dictate, and which, therefore, the law presumes that every man undertakes to perform. Thus, if I employ a person to do any business for me or perform any work, or take up wares with a tradesman, the law implies that I understood or contracted to pay the real value of the services or wares. 2 Bl. Comm. 443. These contracts form the web and woof of actual life. 1 Pars. Cont. 4. There is one species of implied contract which runs through and is annexed to all other contracts, conditions, and covenants, viz., that if I fail in my part of the agreement, I shall pay the other party such damages as he has sustained by my neglect or refusal. See Quantum Meruit; Quantum Valebat; Assumpsit; Comyn, Dig. Action upon the Case upon Assumpsit (A 1) ; Agreement.
(12) Independent contracts are those in which the mutual acts or promises have no relation to each other either as equivalents or as considerations. Civ. Code La. art. 1762.
(13) Mixed contracts are those by which one of the parties confers a benefit on the other, receiving something of inferior value in return, such as a donation subject to a charge.
(14) Contracts of mutual interest are such as are entered into for the reciprocal interest and utility of each of the parties; as sales, exchange, partnership, and the like.
(15) Entire contracts kre. those whose consideration is entire; divisible if the consideration is apportioned, or if an apportionment may be implied by law as to each item to be performed. 40 Cal. 251.
(16) Severable (or separable) contracts are those the considerations of which are by their terms susceptible of apportionment or division on either side, so as to correspond to the several parts or portions of the consideration on the other side. A contract to pay a person the worth of his services as long as he will do certain work, or so much per week as long as he shall work, or to give a certain price per bushel for every bushel of so much corn as corresponds to a sample, would be a severable contract. If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable. So when the price to be paid is clearly and distinctly apportioned to different parts of what is to be performed, although the latter is in its nature single and entire. But the mere fact of sale by weight or measure i. e., so much per pound or bushel does not make a contract severable.
(17) Simple contracts are those not of specialty or record. They are the lowest class of express contracts, and answer most nearly to our general definition of contract. To constitute a sufiScient parol agreement to be binding in law, there must be that reciprocal and mutual assent which is necessary to all contracts. They are by parol, which includes both oral and written. The only distinction between oral and written contracts is in their mode of proof. And it is inaccurate to distinguish verbal from Written; for contracts are equally verbal whether the words are written or spoken, the meaning of verbal being, expressed in words. See 3 Burrows, 1670; 7 Term R. 350, note; 11 Mass. 27, 30; 5 Mass. 299, 301; 7 Conn. 57; 1 Caines (N. Y.) 386.
(18) Specialties are those which are under seal, as deeds and bonds. Specialties are sometimes said to include also contracts of record (1 Pars. Cont. 7), in which case there would be but two classes at common law, viz., specialties and simple contracts. The term specialty is always used substantively. They are the second kind of express contracts, under the ordinary common-law division. They are not merely written, but signed, sealed, and delivered by the party bound. The solemnities connected with these acts, and the formalities of witnessing, gave in early times an importance and character to this class of contracts which implied so much caution and deliberation (consideration) that it was unnecessary to prove the consideration even in a court of equity. Plowd. 305; 7 Term R. 477; 4 Barn. & Adol. 652; 3 Bing. Ill; 1 Fonbl. Eq. 342, note. Though little of the real solemnity now remains, except witnessing, and a scroll is substituted in most of the states for the seal, the distinction with regard to specialties has still been preserved intact. See Consideration. When a contract by specialty is changed by a parol agreement, the whole contract becomes parol. 2 Watts (Pa.) 451; 9 Pick. (Mass.) 298; 13 Wend. (N. Y.) 71.
(19) Unilateral contracts are those in which the party to whom the engagement is made makes no express agreement on his part. They are so called even in cases where the law attaches certain obligations to his acceptance. Civ. Code La. art. 1758. A loan for use and a loan of money are of this kind. Poth. Obi. pt. 1, c. 1, § 1, art. 2.
(20) Onerous contracts are those in which something is given or promised as a consideration for the engagement or gift, or some service, interest, or condition is imposed on what is given or promised, although unequal to it in value.
(21) Principal contracts are those entered into by both parties on their own accounts, or in the several qualities or characters they assume.
(22) Real contracts are those in which it is necessary that there should be something more than mere consent, such as a loan of money, deposit, or pledge, which, from their nature, require a delivery of the thing (res).
(23) Reciprocal contracts are those by which the parties expressly enter into mutual engagements, such as sale, hire, and the like.
(24) Contracts of record are those which are evidenced by matter of record, such as judgments, recognizances, and statutes staple. These are the highest class of contracts. Statutes merchant and staple, and other securities of the like nature, are confined to England. They are contracts entered into by the intervention of some public authority, and are witnessed by the highest kind of evidence, viz., matter of record. 4 Bl. Comm. 465.
(25) Verbal contracts are simple contracts.
(26) Written contracts are those evidenced by writing. In the Civil Law. Pothier’s treatise on Obligations, taken in connection with the Civil Code of Louisiana, gives an idea of the divisions of the civil law. Poth. Obi. pt. 1, c. 1, § 1, art. 2, makes the five following classes: Reciprocal and unilateral; consensual and real; those of mutual interest, of beneficence and mixed: principal and accessory; those which are subjected by the civil law to certain rules and forms, and those which are regulated by mere natural justice. It is true that almost all the rights of personal property do in great measure depend upon contracts of one kind or other, or at least might be reduced under some of them, which is vthe method taken by the civil law. It has referred the greatest part of the duties and rights of which it treats to the head of obligations ex contractu or quasi ex contractu. Inst. 3. 14. 2; 2 BL Comm. 443.

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(Lat. contractus, from con, with, and traho, to draw). An agreement between two or more parties to do or not do a particular thing. Marshall, C. J., 4 Pet. (U.S.) 420, 572. An agreement in which a party undertakes to do or not to do a particular thing. Marshall, C. J. 4 Wheat. (U.S.) 197. An agreement between two or more parties for the doing or not doing of some specified thing. 1 Pars. Cent. 5, It has been variously defined as follows: A compact between two or more parties. 6 Cranch (U.S.) 87, 136. An agreement or covenant between two or more persons, in which each party binds himself to do or forbear some act, and each acquires a right to what the other promises. Enc. Amer.; Webster. A contract or agreement is where a promise is made on one side and assented to on the other; or where two or more persons enter into an engagement with each other by a promise on either side. 2 Steph. Comra. 108, 109. An agreement upon sufficient consideration to do or not to do a particular thing. 2 Bl. Comm. 446; 2 Kent, Comm. 449, A covenant or agreement between two parties with a lawful consideration or cause West. Symb. lib. 1, § 10; Cowell; Blount. A deliberate engagement between competent parties upon a legal consideration to do or to abstain from domg some act. Story, Cont. § 1. A mutual promise upon lawful consideration or cause which binds the parties to a performance. The writing which contains the agreement of parties with the terms and conditions, and which serves as a proof of the obligation. The last is a distinct signification. 2 Hill (N. Y.) 551. We have not included consideration in our definition of contract, because it does not seem to be essential to a contract, although it is necessary to its enforcement. See Consideration. Mr. Stephen, whose definition of contract is given above, thus criticizes the definition of Blackstone, which has been adopted by Chancellor Kent and other high authorities : First, that the word agreement itself requires definition as much as contract; second, that the existence of a consideration, though essential to the validity of a parol contract, forms propperly no part of the idea; third, that the definition takes no sufficient notice of the mutuality which properly distinguishes a contract from a promise. 2 Steph. Comm. 109. The use of the word agreement (aggregatio mentium) seems to have the authority of the best writers in ancient and modem times (see above) as a part of the definition of contract. It is probably a translation of the civil law conventio (con and venio), a coming together, to which (being derived from ad and grego) it seems nearly equivalent. We do not think the objection that it is a synonym (or nearly so) a valid one. Some word of the kind is necessary as a basis of the definition. No two sjmonyms convey precisely the same idea. Most of them have minute distinctions, says Reid. If two are entirely equivalent, it will soon be determined by accident which shall remain in use, and which become obsolete. To one who has no knowledge of a language, it is impossible to define any abstract idea; but to one who understands a language, an abstraction is defined by a synonym properly qualified. By pointing out distinctions and the mutual relations between synonyms, the object of definition is answered. Hence we do not thing Blackstone’s definition open to the first objection. As to the idea of consideration, Mr. Stephens seems correct, and to have the authority of some of the first legal minds of modern times. Consideration, however, may be necessary to enforce a contract, though not essential to the idea. Even in that class of contracts (by specialty) in which no consideration is in fact required, one is always presumed by law; the form of the instrument being held to import a consideration. 2 Kent, Comm. 450, note. A contract without consideration is called a nudum pactum (nude pact) , but it is still a pactum, and this implies that consideration is not an essential. The third objection of Mr. Stephen to the definition of Blackstone does not seem one to which it is fairly obnoxious. There is an idea of mutuality in con and traho, to draw together, but we think that mutuality is implied in agreement as well. An aggregatio mentium se
ems impossible without mutuality. Blackstone, in his analysis, appears to have regarded agreement as implying mutuality; for he defines it (2 Bl. Comm. 442) : A mutual bargain or convention. In our definition, however, all ambiguity is avoided by the use of the words betyreen two or more parties following agreement. In its widest sense, contract includes records and specialties; but this use as a general term for all sorts of obligations, though of too great authority to be now doubted, seems to be an undue extension of the propet meaning of the term, which is much more nearly equivalent to agreement, which is never applied to specialties. Mutuality is of the very essence of both, not only mutuality of assent, but of act. As expressed by Lord Coke, actus contra actum. 2 Coke, 15; 7 Man. & G. 998, argument, and note. This is illustrated in contracts of sale, bailment, hire, as well as partnership and marriage; and no other engagements but those with this kind of mutuality would seem properly to come under the head of contracts. In a bond there is none of this mutuality, no act to be done by the obligee to make the instrument binding. In a judgment there is no mutuality either of act or of assent. It is judicium redditum in invitum. It may properly be denied to be a contract, though Blackstone insists that one is implied. Per Mansfield, 3 Burrows, 1545; 1 Cow. (N. Y.) 316; per Story, J., 1 Mason (U.S.) 288. Mr. Chitty uses obligation as an alternative word of description when speaking of bonds and judgments. Chit. Cont. 2, 4. An act of legislature may be a contract. So may a legislative grant with exemption from taxes. 5 Ohio St. 361. So a charter is a contract between a state and a corporation, within the meaning of the constitution of the United States (article 1, § 10, cl. 1). 27 Miss. 417. See Obligation of Contracts.
(1) Accessory contracts are those made for assuring the performance of a prior contract, either by the same parties or by others, such as suretyship, mortgage, and pledges. Civ. Code La. art. 1764; Poth. Obi. pt. 1, c. 1, § 1; art. 2, note 14.
(2) Contracts of beneficence are those by which only one of the contracting parties is benefited; as loans, deposit, and mandate. Civ. Code La. art. 1767.
(3) Certain contracts are those in which the thing to be done is supposed to depend on the will of the party, or when, in the usual course of events, it must happen in the manner stipulated.
(4) Commutative contracts are those in which what is done, given, or promised by one party is considered as an equivalent to or in consideration of what is done, given, or promised by the other. Civ. Code La. art. 1761.
(5) Gratuitous contracts are those of which the object is the benefit of the person with whom it is made, without any profit or advantage received or promised as a consideration for it. It is not, however, the less gratuitous if it proceed either from gratitude for a benefit before received, or from the hope of receiving one hereafter, although such benefit be of a pecuniary nature. Civ. Code La..§ 1766.
(6) Hazardous contracts are those in which the performance of that which is one of its objects depends on an uncertain event. Civ. Code La. art. 1769.
(7) Consensual contracts are those which are formed by mere consent of the parties, such as all contracts of hiring and mandate.
(8) Executed contracts are those in which nothing remains to be done by either party and where the transaction has been completed, or was completed at the time the contract or agreement was made; as where an article is sold and delivered, and payment therefor is made on the spot.
(9) Executory contracts are those in which some act remains to be done; as when an agreement is made to build a house in six months, to do an act before some future day, to lend money upon a certain interest payable at a future time, A contract executed (which differs in nothing from a grant) conveys a chose in possession; a contract executory conveys a chose in action. 2 Bl. Comm. 443. As to the importance of grants considered as contracts, see Obligation of Contracts.
(10) Express contracts are those in which the terms of the contract or agreement are openly and fully uttered and avowed at the time of making; as, to pay a stated price for certain specified goods; to deliver an ox, etc. 2 Bl. Comm. 443.
(11) Implied contracts are such as reason and justice dictate, and which, therefore, the law presumes that every man undertakes to perform. Thus, if I employ a person to do any business for me or perform any work, or take up wares with a tradesman, the law implies that I understood or contracted to pay the real value of the services or wares. 2 Bl. Comm. 443. These contracts form the web and woof of actual life. 1 Pars. Cont. 4. There is one species of implied contract which runs through and is annexed to all other contracts, conditions, and covenants, viz., that if I fail in my part of the agreement, I shall pay the other party such damages as he has sustained by my neglect or refusal. See Quantum Meruit; Quantum Valebat; Assumpsit; Comyn, Dig. Action upon the Case upon Assumpsit (A 1) ; Agreement.
(12) Independent contracts are those in which the mutual acts or promises have no relation to each other either as equivalents or as considerations. Civ. Code La. art. 1762.
(13) Mixed contracts are those by which one of the parties confers a benefit on the other, receiving something of inferior value in return, such as a donation subject to a charge.
(14) Contracts of mutual interest are such as are entered into for the reciprocal interest and utility of each of the parties; as sales, exchange, partnership, and the like.
(15) Entire contracts kre. those whose consideration is entire; divisible if the consideration is apportioned, or if an apportionment may be implied by law as to each item to be performed. 40 Cal. 251.
(16) Severable (or separable) contracts are those the considerations of which are by their terms susceptible of apportionment or division on either side, so as to correspond to the several parts or portions of the consideration on the other side. A contract to pay a person the worth of his services as long as he will do certain work, or so much per week as long as he shall work, or to give a certain price per bushel for every bushel of so much corn as corresponds to a sample, would be a severable contract. If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable. So when the price to be paid is clearly and distinctly apportioned to different parts of what is to be performed, although the latter is in its nature single and entire. But the mere fact of sale by weight or measure i. e., so much per pound or bushel does not make a contract severable.
(17) Simple contracts are those not of specialty or record. They are the lowest class of express contracts, and answer most nearly to our general definition of contract. To constitute a sufiScient parol agreement to be binding in law, there must be that reciprocal and mutual assent which is necessary to all contracts. They are by parol, which includes both oral and written. The only distinction between oral and written contracts is in their mode of proof. And it is inaccurate to distinguish verbal from Written; for contracts are equally verbal whether the words are written or spoken, the meaning of verbal being, expressed in words. See 3 Burrows, 1670; 7 Term R. 350, note; 11 Mass. 27, 30; 5 Mass. 299, 301; 7 Conn. 57; 1 Caines (N. Y.) 386.
(18) Specialties are those which are under seal, as deeds and bonds. Specialties are sometimes said to include also contracts of record (1 Pars. Cont. 7), in which case there would be but two classes at common law, viz., specialties and simple contracts. The term specialty is always used substantively. They are the second kind of express contracts, under the ordinary common-law
division. They are not merely written, but signed, sealed, and delivered by the party bound. The solemnities connected with these acts, and the formalities of witnessing, gave in early times an importance and character to this class of contracts which implied so much caution and deliberation (consideration) that it was unnecessary to prove the consideration even in a court of equity. Plowd. 305; 7 Term R. 477; 4 Barn. & Adol. 652; 3 Bing. Ill; 1 Fonbl. Eq. 342, note. Though little of the real solemnity now remains, except witnessing, and a scroll is substituted in most of the states for the seal, the distinction with regard to specialties has still been preserved intact. See Consideration. When a contract by specialty is changed by a parol agreement, the whole contract becomes parol. 2 Watts (Pa.) 451; 9 Pick. (Mass.) 298; 13 Wend. (N. Y.) 71.
(19) Unilateral contracts are those in which the party to whom the engagement is made makes no express agreement on his part. They are so called even in cases where the law attaches certain obligations to his acceptance. Civ. Code La. art. 1758. A loan for use and a loan of money are of this kind. Poth. Obi. pt. 1, c. 1, § 1, art. 2.
(20) Onerous contracts are those in which something is given or promised as a consideration for the engagement or gift, or some service, interest, or condition is imposed on what is given or promised, although unequal to it in value.
(21) Principal contracts are those entered into by both parties on their own accounts, or in the several qualities or characters they assume.
(22) Real contracts are those in which it is necessary that there should be something more than mere consent, such as a loan of money, deposit, or pledge, which, from their nature, require a delivery of the thing (res).
(23) Reciprocal contracts are those by which the parties expressly enter into mutual engagements, such as sale, hire, and the like.
(24) Contracts of record are those which are evidenced by matter of record, such as judgments, recognizances, and statutes staple. These are the highest class of contracts. Statutes merchant and staple, and other securities of the like nature, are confined to England. They are contracts entered into by the intervention of some public authority, and are witnessed by the highest kind of evidence, viz., matter of record. 4 Bl. Comm. 465.
(25) Verbal contracts are simple contracts.
(26) Written contracts are those evidenced by writing. In the Civil Law. Pothier’s treatise on Obligations, taken in connection with the Civil Code of Louisiana, gives an idea of the divisions of the civil law. Poth. Obi. pt. 1, c. 1, § 1, art. 2, makes the five following classes: Reciprocal and unilateral; consensual and real; those of mutual interest, of beneficence and mixed: principal and accessory; those which are subjected by the civil law to certain rules and forms, and those which are regulated by mere natural justice. It is true that almost all the rights of personal property do in great measure depend upon contracts of one kind or other, or at least might be reduced under some of them, which is vthe method taken by the civil law. It has referred the greatest part of the duties and rights of which it treats to the head of obligations ex contractu or quasi ex contractu. Inst. 3. 14. 2; 2 BL Comm. 443.

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This definition of Contract Is based on the The Cyclopedic Law Dictionary . This definition needs to be proofread..

Practical Information

Note: Some of this information was last updated in 1982

An agreement between two or more parties whereby each promises to do or refrain from doing some act. A contract may be oral or in writing, sealed or unsealed, except that state statutes, designated as the statute of frauds (see it in U.S. law), require certain agreements to be in writing. A contract may be express or implied. An express contract is one in which the terms are set forth by the parties involved, either orally or in writing. An implied contract is a contract implied by law. If a contract has been fully performed by all the parties to it, it is referred to as an executed contract. Sometimes a contract is executed on the part of one party and executory on the part of the other. For example, when a merchant delivers a good to a customer who has purchased it on credit, the mer
chant’s contract is executed. He or she has completed his or her part of the agreement. On the other hand, the customer’s contract is executory, until such time as the final payment on the good is made.

To be enforceable at law, a contract must have the following elements:

Offer and acceptance

. See Offer and Acceptance here

Competent parties

See Competent Parties in Contracts here.

Legality of subject matter

A contract is illegal if it calls for the performance of an act forbidden by law or against public policy. Gambling and wagering contracts and usurious contracts (see USURY), for example, are generally held to be illegal. In some states any contract entered into on Sunday is illegal. Federal and state laws make illegal those contracts that restrain trade, fix prices, or result in unfair practices. Consideration. Something of benefit to the person making a promise must be given, or some detriment must be suffered by the person to whom a promise is made to make a contract binding. Consideration is the price, motive, or matter inducing the contract; it may consist of (a) doing some act that one is not obligated to perform; (b) refraining from doing something that one would otherwise be free to do; (c) giving some money or property; (d) giving a promise. The value of the consideration is generally immaterial. See also default (in U.S. law).

The above contracts are usually bilateral contracts.

Rescission of contract. To rescind a contract means to abrogate, annul, void, or cancel a contract; particularly, nullifying a contract by the act of a party to it.

1. Bilateral Contract. One in which there are rights and duties on each side, each party being both a promissory and a promise. In a contract of sale (in U.S. law), one party becomes bound to deliver the thing sold, and the other to pay the price of it.

2. Cost Plus Contract. A contract where the contractor charges his or her cost plus a stated percentage of the cost that represents the contractor’s profit. Often used in government contracts.

3. Oral Contract. One that is not in writing or that is not signed by the parties.

4. Output Contract. Where one promises to deliver the entire production to another and the other promises to purchase the entire production supplied.

5. Unilateral Contracts. Where one party makes an express engagement or undertakes a performance, without receiving in return any express engagement or promise or performance from the other. For example, an offer of a reward would be a unilateral contract. There is an offer but no specific acceptance.

(Revised by Ann De Vries)

What is Contract?

For a meaning of it, read Contract in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Contract.

Resources

Contract Definition in the context of the Federal Court System

An agreement between two or more persons that creates an obligation to do or not to do a particular thing.

Contract in the International Business Landscape

Definition of Contract in the context of U.S. international business and public trade policy: An agreement, enforceable by law, between two or more parties to do or refrain from doing something.

Contract