Contract Law P1+P2

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Contract and Business Law * Definitions of a contract Contracts are a very important part of business life. They establish agreements between you and your employees, landlords or tenants, suppliers, customers and other businesses. They are usually drawn up by solicitors. A contract is an agreement that commits you or your business to a course of action. Therefore, it is important that you ask your solicitor or adviser to explain any language or terminology that you may not understand. A contract is also known as the body of law that sets out all the oral and written agreements associated with the exchange of goods and services, money and properties. It may also include topics such as the nature of contractual obligations, the limitation of actions, Freedom of contract, the privity of contract and it also covers agency relationships, commercial paper and contracts of employment. * Contract Types There are at least two different definitions of the term "verbal contract." People use it to describe an oral contract, in which people make a spoken agreement, but that agreement is not formalized with a written contract. In another, more technical way, a verbal contract is any contract which is expressed in words, whether they are written or oral. There are other types of contracts which people can agree to by action or inaction, with no verbal agreement of any kind. The confusion with the term of "oral contract" stems from the fact that many people use the word "verbal" to describe all spoken words. In fact, any written contract is also a verbal contract, because it contains words. Therefore, when people are talking about a spoken agreement, they should really use "oral contract" to make sure that people understand what they mean, as otherwise someone may believe that the contract was written. In a verbal contract, the expectations of the contract are

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