5.

Law for Business, 17e

by Ashcroft and Ashcroft

Chapter 5:
Nature and Classes
of Contracts
 5.2

Chapter 5 Objectives

State the five requirements for a

valid contract.
Describe the types of contracts and
how they differ from agreements.
Explain the difference between a
contract and a quasi contract.
 5.3

Contracts

A contract can be defined as a

legally enforceable agreement
between two or more competent
persons.
A breach of contract is the failure
of one of the parties to perform the
obligations assumed under the
contract.
 5.4

Requirements of a Valid
Contracts
1. Based on a mutual agreement by
the parties
2. Made by competent parties
3. Supported by consideration given
by each party to the contract
4. Be for a lawful purpose
5. Sometimes meet certain formal
requirements
 5.5

Contract or Agreement?

All contracts are

agreements, but not all
agreements are
contracts.
 5.6

Void and Voidable

Contracts
A void contract is an agreement
with no legal effect
It is not enforceable in court.
It is not the same as an unenforceable
contract.
A voidable contract would be an
enforceable agreement, but,
because of circumstances, one or
both parties may elect to void it
 5.7

Types of Contracts

Express and implied

Formal
Recognizance
Negotiable instruments
Simple
Unilateral and bilateral
 5.8

Types of Contracts

Written and oral

Executory and executed
Unilateral and bilateral
Quasi or implied in law contracts
Unjust enrichment
 5.9

Have any questions?

Be sure you study the

cases in the textbook
for a thorough
understanding of this
chapter.