Management and Organizational Studies 2275A/B Chapter 6: Chapter 6 - Formation of Contracts.docx

126 views5 pages

Document Summary

Contract - a voluntary exchange of promises, creating obligations that, if defaulted on, can be enforced and remedied by the courts. People are creating and defining their own rules and obligations freedom of contract - people can enter into almost any contractual agreement, as long as the contract meets the common law requirements. Formal contract - one that is sealed by the party to be bound. Simple contracts (parol contracts) - may be verbal or written but are not under seal. Express contract - parties have expressly stated their agreement, either verbally or in writing. Implied contract - inferred from the conduct of the parties (when people deposit coins into vending machine, it can be inferred that they intend to create contractual relationship, thus implied contract is in force) Valid contract - one that"s legally binding on both parties. Void contract - does not qualify as a legally binding contract because an essential element is missing.