1 Contract Defined
A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.
2 Promise; Promisor; Promisee; Beneficiary
1. A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
2. The person manifesting the intention is the promisor.
3. The person to whom the manifestation is addressed is the promisee.
4. Where performance will benefit a person other than the promisee, that person is a beneficiary.
3 Agreement Defined; Bargain Defined
An agreement is a manifestation of mutual assent on the part of two or more persons. A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.
4 How a Promise May Be Made
A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct.
5 Terms of Promise, Agreement, or Contract
1. A term of a promise or agreement is that portion of the intention or assent manifested which relates to a particular matter.
2. A term of a contract is that portion of the legal relations resulting from the promise or set of promises which relates to a particular matter, whether or not the parties manifest an intention to create those relations.
6 Formal Contracts
The following types of contracts are subject in some respects to special rules that depend on their formal characteristics and differ from those governing contracts in general:
- Contracts under seal,
- Negotiable instruments and documents,
- Letters of credit.
7 Voidable Contracts
A voidable contract is one where one or more parties have the power, by a manifestation of election to do so, to avoid the legal relations created by the contract, or by ratification of the contract to extinguish the power of avoidance.
8 Unenforceable Contracts
An unenforceable contract is one for the breach of which neither the remedy of damages nor the remedy of specific performance is available, but which is recognized in some other way as creating a duty of performance, though there has been no ratification.