Bus 311 Week 5 Essay: Contracts

2335 Words10 Pages
A contract is defined as “a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements” (Liuzzo, 2010, p 79). While all contracts are agreements, not all agreements are contracts, because not all agreements can be enforced by law. There are many reasons that a contract may be created, such as the sale of merchandise or services, employment, or to transfer ownership of land (real property) or personal property. (p 79) There are various types of contracts and several elements that make an enforceable contract. A contract may be classified in several ways. First we have oral contracts, which is “one that is not in writing or signed by the parties” (Liuzzo, 2010, p 81). A person can make many verbal contracts in a day and many contracts in business and private life are verbal contracts. (p 81) For instance, if a parent tells her daughter that if she cleans her room she can borrow the car and the daughter follows through with her part of the agreement, then they have a verbal contract. The mother should follow through with her end of the agreement. It is not very likely that this type of verbal contract, if broken, would ever go to court, but if the mother does not follow through with her part of the agreement, then the daughter would be very hesitant to make such agreements in the future. “Although an oral contact may be just as binding as a written contract, it is advisable to put a contract in writing if the transaction is important or complicated, if the contract involves a large amount of money, or if the contract will extend over a long period of time” (p 81). A written contract, which is “one that is reduced to writing on a permanent surface”, can be “a handwritten note, a printed statement, a letter
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