Contract – a written agreement between two or more parties creating obligations enforceable &/or recognized at law:

n. (14c.)

1. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law <a binding contract>.

2. The writing that sets forth such an agreement <a contract is valid if valid under the law of the residence of the party wishing to enforce the contract>. [1]

     Excerpt from William R. Anson’s Principles of the Law of Contract (Arthur L. Corbin ed., 3d Am. ed. 1919):

     “The term contract has been used indifferently to refer to three different things:

(1) the series of operative acts by the parties resulting in new legal relations;
(2) the physical document executed by the parties as the lasting evidence of their having performed the necessary operative acts and also as an operative fact in itself;
(3) the legal relations resulting from the operative acts, consisting of a right or rights in personam and their corresponding duties, accompanied by certain powers, privileges, and immunities.

The sum of these legal relations is often called ‘obligation.’ The present editor prefers to define contract in sense (3) . . . . [2]

     Excerpt fromSamuel Williston’s A Treatise on the Law of Contracts (Walter H.E. Jaeger ed., 3d ed. 1957):

     “A contract is a promise, or a set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. This definition may not be entirely satisfactory since it requires a subsequent definition of the circumstances under which the law does in fact attach legal obligation to promises. But if a definition were attempted which should cover these operative facts, it would require compressing the entire law relating to the formation of contracts into a single sentence. [3]

     Excerpt from John D. Calamari & Joseph M. Perillo’s The Law of Contracts (4th ed. 1998):

     “The term ‘contract’ is also used by lay persons and lawyers alike to refer to a document in which the terms of a contract are written. Use of the word in this sense is by no means improper so long as it is clearly understood that rules of law utilizing the concept ‘contract’ rarely refer to the writing itself. Usually, the reference is to the agreement; the writing being merely a memorial of the agreement. [4]

3. A promise or set of promises by a party to a transaction, enforceable or otherwise recognizable at law; the writing expressing that promise or set of promises <when the lessor learned that the rooms were to be used for the delivery of blasphemous lectures, he declined to perform his contract>.  See Restatement (Second) of Contracts § 2 (1979).

     Excerpt from John D. Calamari & Joseph M. Perillo’s The Law of Contracts 5 1.1, at 1-2 (4th ed. 1998):

     “The promissory element present in every contract is stressed in a widely quoted definition: ‘A contract is a promise, or set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.’ [1 Samuel Williston, Contracts § 1.1 (4th ed. 1990).] This, like similar definitions, is somewhat misleading. While it is true that a promise, express or implied, is a necessary element in every contract, frequently the promise is coupled with other elements such as physical acts, recitals of fact, and the immediate transfer of property interests. In ordinary usage the contract is not the promise alone, but the entire complex of these elements. [5]

4. Broadly, any legal duty or set of duties not imposed by the law of tort; especially, a duty created by a decree or declaration of a court <an obligation of record, as a judgment, recognizance, or the like, is included within the term “contract”>.

5. The body of law dealing with agreements and exchange <the general theory of contract>.

6. The terms of an agreement, or any particular term <there was no express contract about when the money was payable>.

7. Loosely, a sale or conveyance.

     Excerpt from John Edward Murray Jr.’s Murray on Contracts (2d ed. 1974):

     “Sometimes the word ‘contract’ is used to designate a transaction involving the exchange of goods or land for money.  When money is exchanged for goods, this constitutes a sale.  When money is exchanged for land, this constitutes a conveyance.  Sales and conveyances may be the result of a previous contract but they are not the contracts themselves.  There is no undertaking or commitment to do or refrain from doing anything in the future.  This indispensable element of contract is missing. [6]

9. Loosely, an enforceable agreement between two or more parties to do or not to do a thing or set of things; a compact <when they finally agreed, they had a contract>. -contract, vb. – contractual, adj.

     Excerpt from Sturges v. Crowninshield, 17 U.S. (4 Wheat) 122, 143 (1819):

     “A contract is an agreement in which a party undertakes to do, or not to do, a particular thing.” [7]

ex contractu:

[Latin ‘from a contract] (17c.) Arising from a contract <action ex contractu>.” [1]

     Equity Law is law which compels performance.  It compels you to perform to the exact letter of any contract that you are under.  So, if you have compelled performance, there must be a contract somewhere, & you are being compelled to perform under the obligation of the contract.  Now this can only be a civil action – not criminal.  In Equity Jurisdiction, you cannot be tried criminally, but you can be compelled to perform to the letter of a contract.  If you then refuse to perform as directed by the court, you can be charged with contempt of court, which is a criminal action.  

    If a contract is violated, a Civil Action could be filed in order to compel performance via a Writ of Replevin or via a type of Vicontiel Writ called a Writ of Justice.

Contracts Must be Voluntary:

     Under the Common Law, every contract must be entered into knowingly, voluntarily, & intentionally by both parties or it is void & unenforceable.  These are characteristic- it must be based on substance.  For example, contracts used to read, “For one dollar & other valuable considerations, I will paint your house, etc.”  That was a valid contract.  A contract must be based on substance. [8]

History Worth Remembering:

     Arguably the most powerful passages on the purpose of the contract come from the works of John Locke, whose writings inspired the American, English, and French Revolutions.  Locke was the most quoted authority on government in the 1760-1776 period prior to American independence.  Thomas Jefferson was accused of plagiarizing Locke in certain sections of the Declaration of Independence by fellow Virginian delegate Richard Henry Lee. [9]  Here are excerpts from Two Treatises of Civil Government:

On Civil Government – Ch. I:

§ 1.

     Slavery is so vile & miserable an estate of man, & so directly opposite to the generous temper & courage of our nation, that it is hardly to be conceived, that an Englishman, much less a gentleman, should plead for it….

Second Treatise of Civil Government – Ch. IV “Of Slavery”:

§ 22.

   THE natural liberty of man is to be free from any superior power on earth, & not to be under the will or legislative authority of man, but to have only the law of nature for his rule. The liberty of man, in society, is to be under no other legislative power, but that established, by consent, in the commonwealth; nor under the dominion of any will, or restraint of any law, but what that legislative shall enact, according to the trust put in it.  Freedom then is not what Sir Robert Filmer tells us… ‘a liberty for every one to do what he lists, to live as he pleases, & not to be tied by any laws’: but freedom of men under government is, to have a standing rule to live by, common to every one of that society, & made by the legislative power erected in it; a liberty to follow my own will in all things… & not to be subject to the inconstant, uncertain, unknown, arbitrary will of another man…

§ 23.

  This freedom from absolute, arbitrary power, is so necessary to, & closely joined with a man’s preservation, that he cannot part with it… for a man, not having the power of his own life, cannot, by compact (“compact” is an Old English term for “Contract” or “Agreement”), or his own consent, enslave himself to any one, nor put himself under the absolute, arbitrary power of another, to take away his life, when he pleases… for, whenever he finds the hardship of his slavery outweigh the value of his life, it is in his power, by resisting the will of his master, to draw on himself the death he desires.

§ 24.

  … [T]he perfect condition of slavery, which is nothing else, but the state of war… between a lawful conqueror & a captive… Once compact (contract) enter between them, & make an agreement for a limited power on the one side, & obedience on the other, the state of war & slavery ceases, as long as the compact endures: for, as has been said, no man can, by agreement, pass over to another that which he hath not in himself, a power over his own life.

    … we find among the Jews, as well as other nations, that men did sell themselves; but, it is plain, this was only to drudgery, not to slavery: for, it is evident, the person sold was not under an absolute, arbitrary, despotical power: for the master could not have power to kill him, at any time, whom, at a certain time, he was obliged to let go free out of his service; & the master of such a servant was so far from having an arbitrary power over his life, that he could not, at pleasure, so much as maim him, but the loss of an eye, or tooth, set him free, Exod. Xxi[10]

Six Elements of a Legal Contract:

1. Offer – The offer is the very first part of creating a contract.  It is the proposal a person or entity gives to another with the intention of entering into a valid contract.  For example, Martha offers Karen fifty dollars a week in exchange for Karen to come in and clean her house.

2. Acceptance – A contract cannot legally exist without the offeree giving acceptance to the proposed offer.  Without mutual consent from both parties however, there is no valid contract.  Karen accepting Martha’s offer of fifty dollars for her services, & both Karen and Martha agreeing to go through with the exchange, is acceptance and mutual consent.

3. Consideration – The object, event, service, payment, etc. that the contract is created for is called the consideration of the contract, but both parties must give something of value.  In this scenario, Karen will receive fifty dollars per week, and Martha’s house will be cleaned every week.

4. Legality of subject matter – Legality of subject matter refers to the fact that in order for a contract to be valid, it must be formed for a legal
purpose and has to follow any statutory regulations with respect to the contract created. It is legal for Martha to hire Karen to clean her house, but not to rob a bank.

5. Contractual capacity – A person has the contractual capacity to enter into a contract as long as they have the legal ability to. So if Karen
was a ten-year-old child, she would need her parent’s consent and signature in order to sign the contract, since Karen’s age & lack of experience overall makes her incapable contractually.

6. Contractual intent – Even with all of the above elements, a contract will not exist if the two parties did not subjectively want to enter
into a contract. On paper, Karen has signed the contract to clean Martha’s home weekly, and receives a weekly payment of fifty dollars.  However, what if the only reason Karen signed the contract was because Martha threatened to show fabricated proof to Karen’s boss that she was stealing money from the company she works for?

    Because of this situation, Karen did not demonstrate contractual intent to enter this relationship with Martha.  Regardless of the type of contract created, all of these elements are crucial to a legally binding contract.  Valid contracts are important to all businesses, & all facets of a business, whether the relationship is between the company & a customer, vendor, partner, etc.  It is important to understand what a legal contract can adhere a person or business to, & understanding the basics can certainly clear up some of the confusion. [11]

Types of Contracts:

Absolute Simulated Contract – a simulated contract that the parties intend to be wholly ineffective.

Accessory Contract – entered into primarily for the purpose of carrying out a principal contract; especially for the purpose of obtaining by surety, mortgage, etc.

Adhesion Contract – a standard-form contract prepared by one party, to be signed by another party in a weaker position, usually a consumer, who adheres to the contract with little choice about the terms. — aka contract of adhesion; adhesive contract; adhesory contract; adhesionary contract; take-it-or-leave-it contract; leonine contract

Aleatory Contract – where at least one party’s performance depends on some uncertain event that is beyond the control of the parties involved (i.e. insurance contracts and life annuities). — aka hazardous contract; wagering contract.

Alternative Contract – the performing party may elect to perform one of two or more specified acts to satisfy the obligation, usually permitting that party to choose the manner of performance. — aka alternative methods-of-performance contract.

Assessment Contract – wherein the payment of a benefit is dependent on the collection of an assessment levied on persons holding similar contracts.

Best Efforts Contract – wherein a party undertakes to use best efforts to fulfill the promises made rather than to achieve a specific result.

Bilateral Contract – wherein each party promises a performance, so that each party is an obligor on that party’s own promise.  — aka mutual contractreciprocal contract; (in civil law) synallagmatic contract.

Blanket Contract – covers a group of products, goods, or services for a fixed period.

Bona Fide Contract – wherein equity may intervene to correct inequalities and to adjust matters according to the parties’ intentions.

Build-to-Print Contract – requires the contractor to build a product according to exact technical specifications provided by the customer. aka design specification contract.

Certain Contract – performed in a stipulated manner.

Collateral Contract – a side agreement made before or at the same time that relates to a contract that, if unintegrated, can be supplemented by evidence of the side agreement.

Commutative Contract – at the time it is formed, the parties’ obligations and advantages are certain and determinate so that nonperformance by either affords a defense to the other.  — aka hypothetical contract.

Conditional Contract – enforceable only if another agreement is performed or if another particular prerequisite or condition is satisfied.

Consensual Contract – arising from the mere consensus of the parties, without any formal or symbolic acts performed to fix the obligation.

Construction Contract – sets forth the specifications for a building project’s construction, usually secured by performance and payment bonds to protect the owner and the subcontractors.

Consumer Contract – between a merchant seller and an individual who buys or contracts to buy goods to ensure the buyer intends to use them primarily for personal, family, or household purposes.

Continuing Contract – calls for periodic performances.

Contract for Sale – for the present transfer of property for a price (“contract of sale“), or to sell goods at a future time (“contract to sell“).

Contract for Services – for a job undertaken by an independent contractor, as opposed to an employee.

Contract in Restraint of Trade – limits the free exercise of business or trade (esp. stipulating that one who sells a business cannot open a similar business within a specified distance of the business being sold).

Contract of Insurance See INSURANCE POLICY.

Contract of Pledge – wherein a debtor gives a creditor property to hold as security for a debt or the performance of a promise.

Contract of Record – declared by a court and entered into the court’s record (not a true contract).


5 Contract of service. 1. See CON’i n AC r on Si nvrw. 2. ice GMployment contract.

5 comract of subscription. See sunscnip’rion (3).

5$0ntract to pledge. (1866) 1. An agreement purport mg to create a present ledge without a bnilmcnt. 2. An agreement to make a uture bailment for the purpose or security. See PLEDGE (3).

5 centract to satisfaction. See satisfaction contract. 5 centract to sell. See contract for sale (2).

5 Contract uberrimaejidei ( oo-ber-a-mee fI-deed), (1916) A contract in which t e parties owe each other duties with the utmost good faith.

“in a certain restricted group of contracts good faith is peculiarly necessary owing to the relationship between the parties, and in these cases known as contracts uberrimae fidei -there is a full duty to disclose all material facts. The typical instance of such contracts is the contract of insurance. Here the duty to disclose all material facts to the insurer arises from the fact that many of the relevant circumstances are within the exclusive knowledge of one party, and it would be impossible for the insurer to obtain the facts necessary for him to make a proper calculation of the risk he is asked to assume without this knowledge.” P.S. Atiyah, An Introduction to the Law of Contract 221-22 (3d ed. 1981).

5 contract under hand. (18c) Archaic. A contract entered into by individual signature by a duly authorized person, as opposed to a contract executed under seal or by deed.

> contract under seal. (1827) A formal contract that requires no consideration and has the seal of the signer attached. 0 A contract under seal must be in writing or printed on paper or parchment and is conclusive between the parties when signed, sealed, and delivered. Delivery is made either by actually handing it to the other party (or party’s representative) or b stating an intention that the deed be operative even though it is retained in the possession of the party executing it. Modern statutes have mostly eliminated the special effects of a sealed contract. Also termed sealed contract; agreement under seal; special contract; deed; covenant; specialty; specialty contract; common-law spe~ cialty. See SEAL. Cf. sealed instrument under INSTRU


”The only formal contract of English law is the contract under seal, sometimes also called a deed and sometimes a specialty. it is the only formal contract, because it derives its validity neither from the fact of agreement, nor from the consideration which may exist for the promise of either party, but from the form in which it is expressed.” William R. Anson, Principles of the Law of Contract 82 (Arthur L. Corbin ed., 3d Am. ed. 1919).

“Contracts under seal also bear little resemblance to ordinary contracts, although here at least the liability is based on a promise. A contract under seal, that is to say a deed, . . . is a written promise or set of promises which derives its validity from the form, and the form alone, of the executing instrument. in point of fact the ‘form’ of the deed is nowadays surprisingly elastic. The only necessities are that the deed should be intended as such, and should be signed, sealed, and delivered. The seating, however, has now become largely a fiction, an adhesive water simplY being attached to the document in place at a genuine so» Similarly, ‘delivery’ is not literally necessary, provided th there is a clear intention that the deed should be op 18 rive.” P.S. Atiyah, An Introduction to the Law of Contra“ 31 (3d ed. 1981).

, cost-plus contract. (1920) A contract In which yment is based on a fixed fee or a percentage added lot we ctu l cost incurred; esp., a construction contract in which the owner pays to the builder the actual costs of m ten l and labor plus a fixed percentage over that at munt.

, de facto contract of sale. (1918) A contract th t p as property but is defective in some element.

y dependent contract. (1831) A contract condition or dependent on another contract.

p deposit contract. (1906) An agreement between a r a cial institution and its customer governing the treat’ ment of deposited funds and the payment of checks and other demands against the customer’s account.

>design-specification contract. See build-to-print contract.

v destination contract. (1958) A contract in which the seller bears the risk of loss until the goods arrive at the destination. UCC § 2-509. Cf. shipment contract.

> discharged contract. See void contract (2). > divisible contract. See severable contract.

> dual contract. (1849) One of two contracts entered by the same parties for the same transaction, sometimes so that one contract may be used to defraud a person or entity (such as a lender) as to the terms of the parties’ actual agreement.

> employment contract. (1927) A contract between an employer and employee in which the terms and conditions of employment are stated. Also termed contract of employment; contract of service; service contract.

> engineering, procurement, and construction contract. (1991) A fixed-price, schedule-intensive construction contract -typical in the construction of single-purpose projects, such as energy plants in which the contractor agrees to a wide variety of responsibilities, including the duties to provide for the design, engineering, procurement, and construction of the facility; to prepare start-up procedures; to conduct performance tests; to create operating manuals; and to train people to operate the facility. -Abbr. EPC contract. -Also termed turnkey contract. See SINGLE-PURPOSE PROJECT.

> entire contract. 1. A nonseverable contract that cannot be supplemented by anything external to the contract. 2. A contract that has been completely performed. 3. See indivisible contract.

> entire-output contract. See output contract.

b escrow contract. (1908) The contract among buyer, seller, and escrow holder, setting forth the rights and responsibilities of each. See ESCROW.

> evergreen contract. (1962) A contract that renews itself from one term to the next in the absence of contrary notice by one of the parties.

” exclusive contract. See EXCLUSIVE-DEALING ARRANGEEXT.

executed contract. (18c) 1. A contract that has been fully performed by both parties. 2. A signed contract.

pexecutory contract (cg zek ya tor ee). (18c) l. A contract that remains wholly unperformcd or for which

there remains something still to be done on both sides, often as a component of a larger transaction and some times memorialized by an in formal letter agreement, by a memorandum, or by oral agreement.

“if a contract is wholly executory, and the legal duties at the parties are as yet unfulfilled, it can be discharged by mutual consent. the acquittance of each from the other 3 claims being the consideration for the promise of each to waive his own.” William R. Anson, Principles of the Law a] Contract 138 (Arthur L. Corbin ed., 3d Am. ed. 1919).

2Bankruptcy. A contract under which debtor and non debtor each have unperformed material obligations and the debtor, if it ceased further performance, would have no right to the other party’s continued performance.

> express contract. (17c) A contract whose terms the

parties have explicitly set out. -Also termed special contract. Cf. implied contract.

v financial contract. Securities. An arrangement that ( 1) takes the form of an individually negotiated contract, agreement, or option to buy, sell, lend, swap, or repurchase, or other similar individually negotiated transaction commonly entered into by participants in the financial markets; (2) involves securities, commodities, currencies, interest or other rates, other measures of value, or any other financial or economic interest similar in purpose or function; and (3) is entered into in response to a request from a counterparty for a quotation, or is otherwise entered into and structured to accommodate the objectives of the counterparty to such an arrangement. 4

> iixed-price contract. (1922) A contract in which the buyer agrees to pay the seller a definite and predetermined price regardless of increases in the seller’s cost or the buyer’s ability to acquire the same goods in the market at a lower price.

> formal contract. (17c) A contract made through the observance of certain prescribed formalities. 0 Among the formal contracts are the contract under seal, the recognizance, the negotiable instrument, and the letter of credit. See formal agreement under AGREEMENT. Cf.

informal contract. > form contract. See standard form contract.

> forward contract. (1874) An agreement to buy or sell a particular nonstandardized asset (usu. currencies) at a fixed price on a future date. 0 Unlike a futures contract, a forward contract is not traded on a formal exchange. Also termed forward agreement. Cf. FUTURES CONTRACT.

, futures contract. See FUTURES CONTRACT.

> gambling contract. (1809) An agreement to engage in a gamble; a contract in which two parties wager something, esp. money, for a chance to win a prize. 0 Where gambling is legal, contracts related to legal gambling activities are enforceable. -Also termed gaming contract. See wagering contract (1). “Generally, under or apart from statutes so providing, or prohibiting such contracts or transactions, gambling con

tracts and transactions are illegal and void and cannot be enforced; and such contracts are void ab initio. . . . A  gambling contract is invalid, no matter what outward form it may assume, and no ingenuity can make it legal.” 38 C.J.S. Gaming 5 26, at 138 39 (1996).

7 government contract. (18c) A contract, cap. for the purchase of goods and services, to which a government or government agency is a party. See procurement contract.

p gratuitous contract (gra-t[y]oo~i tas). (18c) 1. A contract made for the benefit of a promisee who does not give consideration to the promisor. Also termed contract of beneficence; contract of benevolence. Cf. onerous contract. 2. Civil law. A contract in which one party promises to give a beneiit to the other party without expecting or gaining any benefit in return. –Also termed voluntary contract.

y grubstake contract. (1888) A contract between two parties in which one party provides the grubstake ~money and supplies -and the other party prospects for and locates minerals on public land. 0 Each party acquires an interest in the minerals as agreed to in the contract. Grubstake contracts are used chiefly in the western United States. In some states, such as Alaska, a request for grubstake money is considered the offer of a security and must be registered. -Also termed grubstaking contract.

> guaranteed-sale contract. (1980) A contract between a real-estate agency and a property owner in which the agency agrees to buy the property at a guaranteed price after a specified length of time if it has not been sold under the listing agreement. 0 The guaranteed price is usu. a substantial discount from the listed price. ~ Also termed guaranteed-purchase contract.

b guaranty contract. See GUARANTY (1). > hazardous contract. See aleatory contract.

> hedging contract. (1848) A contract of purchase or sale that amounts to insurance against changing prices by which a dealer contracts to buy or sell for future delivery the same amount of a commodity as he or she is buying or selling in the present market.

> hypothetical contract. See conditional contract.

b illegal contract. (18c) A promise that is prohibited because the performance, formation, or object of the agreement is against the law. 0 Technically speaking, an illegal contract is not a contract at all because it cannot be enforced, so the phrase is a misnomer. Cf. unenforceable contract; void contract;

“An illegal contract is exceptionally difiicult to define. It does not merely mean a contract contrary to the criminal law, although such a contract would indubitably be illegal. But a contract can well be illegal without contravening the criminal law, because there are certain activities which the law does not actually prohibit, but at the same time regards as contrary to the public interest and definitely to be discouraged, for instance, prostitution. While a void contract is not necessarily illegal, an illegal contract is often void. However, the consequences of an illegal contract differ somewhat from those usually produced by a simply void contract, so illegal contracts are usually accorded separate treatment.” P.S. Atiyah, An Introduction to the Law of Contract 38 (3d ed. 1981).

b illusory contract. (18c) An agreement in which one party gives as consideration a promise that is so insubstantial as to impose no obligation. 0 The insubstantial promise renders the agreement unenforceable.

lmmoral contract. (186:) An agreement that m fl grantly violates societal norms as to be uneninrtti; Q

‘* implied contract. (17c) 1. An implied in law cont: 0 2. An implied in fact contract. (.l’. express comm”

” Implied in fact contract. U913) A contract th ”h parties presumably intended as their tacit undem n a ing, as inferred from their conduct and other circum stances. Also termed contract implied infm 1, ”than”! contract.

* lm lied in law contract. (1932) An obligation cre ,c by aw for the sake ofjustice; apecif., an airing in, imposed bylaw because of some special relationship between the parties or because one of them Wnuld otherwise be unjustly enriched. 0 An implied in law contract is not actual] a contract, but instead it a remedy that allows the p aintiff to recover a bend” conferred on the defendant. –Also termed quasi con tract; contract implied in law; constructive contract. See UNIUST ENRICHMENT. Cf. QUANTUM MERUIT. “The term ‘quasi contracts’ may with propriety be applied to all noncontractual obligations which are treated, for the purpose of affording a remedy, as if they were contracts. So interpreted, the subject includes: (1) judgments and other so-called contracts of record; (2) a number of ofiicial and statutory obligations, such as the official obligation of a sheriff to levy execution and pay over the proceeds, and the statutory obligation of the owner of a vessel to pay pilotage; and (3) obligations arising from ‘unjust enrichment,’ i.e. the receipt by one person from another of a

benefit the retention of which is unjust.” Frederic Campbell Woodward, The Law of Quasi Contracts 5 1, at 1-2 (1913).

“[A]dventurous courts have turned to the idea of a ‘contract implied in law,’ a ‘quasi-contract’ –not really a contract, a legal fiction necessary to promote the ends of justice and, in particular, to prevent ‘unjust enrichment.” Grant Gilmore, The Death of Contract 73-74 (1974).

“Since . . . claims for the redress of unjust enrichment did not fit comfortably into either the category of contract or that of tort, they came to be described as claims in quasi~ contract. Some of them were originally characterized as being in quantum meruit (as much as he deserved), a form of action used for claims to payment for services. This procedural term has persisted and is sometimes used inexactly as a synonym for the more general term quasi-contract, which refers to any money claim for the redress of unjust enrichment.” E. Allan Farnsworth, Contracts 5 2.20, at 103

(2d ed. 1990).

v impossible contract. (17c) An agreement that the law will not enforce because there is no feasible way for one of the parties to perform. See IMPOSSIBILITY (3).

> indemnity contract. (1835) A contract by which the promisor agrees to reimburse a promisee for some loss irrespective of a third person’s liability. Also termed contract of indemnity.

> independent contract. (1801) A contract in which the mutual acts or promises of the parties have no relation to each other, either as equivalents or as consideration. Cf. commutative contract.

r indivisible contract. (1808) A contract under which the parties’ obligations are interdependent, so no party can demand performance from another unless it also performs or is ready and willing to do so. Also termed entire contract.

v inferred contract. See implied-in-fact contract.

9 informal contract. (1850) 1. A contract other than one undct seal, a recognizance, or a negotiable instrument;

specifi, that derives its (one not from the oh W

of formalities but because of the presence in til i action ofcertain elements that are mu we eat peOple make promises with binding inter t 7 mutual assent and consideration (or dev Le oi t‘ l consideration). 0 An informal contr ct m y b d with or without a writin . Most modem m it l ‘ informal. -Also termed rargaim simple contract 2. parol contract. Cf. formal cuntrm i.

“in general, there are five essential elements to t ‘0’ tion of an informal contract. T hes. are (1) m rt 1 v (2) consideration or some other validation darv re, i i W” or more contracting parties (no arson m y co tr (.1 W himself); (4) parties aving lega capacity to co r (l l l the absence of any statute or common law ru doc f

the particular transaction to be void. The fourt ‘ elements are essential to the creation of any co tr Ctv formal or informal. The first, second and third e e 9

are essential to the formation of informal contracts.” J ngard Murray Jr., Murray on Contracts 5 17, at 28 (2d 9d’ 1 74).

y innominate contract (i-nom-a-nit). (18c) Roman 6′ civil law. A contract not classihable under any particu’ lar name; a contract for which the law supplies nothing in addition to the express agreement of the parties. La. Civ. Code art. 1914. 0 This type of contract was devel~ oped late in classical Roman law. Although the agreements were reciprocal, they did not become operational without at least part performance. -Also termed innominate real contract. Cf. nominate contract.

> installment contract. (1896) A contract requiring or authorizing the delivery of goods in separate lots, or payments in separate increments, to be separately accepted. 0 Under the UCC, this type of agreement will be considered one contract even if it has a clause stating that each delivery is a Separate contract. UCC § 2-612(1).

p installment land contract. (1909) A contract for the sale of land providing that the buyer will receive immediate possession of the land and pay the purchase price in installments over time, but that the seller will retain legal title until all payments are made. -~ Also termed contract for deed; land contract; land sales contract.

, integrated contract. See INTEGRATED CONTRACT.

r interstate contract. (1882) 1. A contract whose parties are residents of different American states. 2. A contract made between denizens of different nations. 0 Private international law may be used to resolve conflicts in such an agreement.

> invalid contract. (18c) An agreement that is either void or voidable. -Also termed invalid agreement.

> investment contract. See INVESTMENT CONTRACT.

b joint contract. (17c) A contract in which two or more promisors are together bound to fulfill its obligations, or one in which two or more promisees are together entitled to performance. Cf. severable contract.

5 land contract. See installment land contract. 5 land sales contract. See installment land contract. bleonine contract. See adhesion contract.

5 letter contract. (1949) In federal contract law. a written contract with sufficient provisions to permit the contractor to begin performance.

5 leverage contract. See LEVERAGE CONTRACT.

literal contract. (18C) 1. Roman law. A type of written contract originally created by and later evidenced by -an entry of the sum due on the debit side ofa ledger, binding a signatory even though the signatory receives no consideration. 0 Literal contracts were often used for novations. See LITTERIS OBLIGATIO.

“Though an obligation could be created by a literal contract in the time of Gaius, the so-calied literal contract of Justinian was not, in itself, a means of creating an obligation, but was the evidence of an obligation created in some other way . . . . The true literal contract, as described by Gaius, may be defined as a means of creating an obligation to pay money by a fictitious entry . . . in the creditor’s account book . . . with the consent of the intended debtor. A, with B’s consent, enters the fact that B is indebted to him . . . and thereupon B is under an obligation to pay, though no money has passed between them.” R.W. Leage, Roman Private Law 316-17 (C.H. Ziegler ed., 2d ed. 1930).

2. Civil law. A contract fully evidenced by a writin g and binding on the signatory.

v marine contract. See maritime contract.

> maritime contract. (17c) A contract that is recognized in admiralty jurisdiction. 0 In general, a maritime contract relates to a vessel in its use as such, to navigation on navigable waters, to transportation by sea, or to maritime employment. –Also termed marine contract.

> marketing contract. (1920) 1. A business’s agreement with an agency or other association for the promotion of sales of the business’s goods or services. 2. An agreement between a cooperative and its members, by which the members agree to sell through the cooperative, and the cooperative agrees to obtain an agreed price.

> marriage contract. (16c) A form of mutual consent required for a matrimonial relationship to exist according to the law of the place where the consent takes place. -Also termed contract of marriage.

> mixed contract. (17C) 1. Civil law. A contract in which the respective benefits conferred are unequal. 2. A contract for the sale of both goods and services. 0 The UCC may apply to a mixed contract if the predominant

purpose is for the sale of goods. > mutual contract. See bilateral contract.

r naked contract. See NUDUM PACTUM.

> nominate contract (nom-a-nit). (17c) Civil law. A contract distinguished by a particular name, such as sale, insurance, or lease, the’very use of which determines some of the rules governing the contract and the contractual’rights of the parties, without the need for special stipulations. 0 The contracts are generally divided into four types, real (arising from something done), oral (arising from something said), literal (arising from something written), and consensual (arisin from something agreed to). La. Civ. Code art. 1914. C . innominate contract.

r nude contract. See NUDUM PACTUM.

p nugatory contract. A contract that is either wholly worthless to one party or of only trivial value to that

party. a» onerous contract. (17c) Civil law. A contract in which

each party is obligated to perform in exchange for the

other’s promise of performance. La. Civ. Code art. 1909. Cf. gratuitous contract.

b option contract. See OPTION (2).

oral contract. A cont nut that has been agreed to in t not fully reduced to writ ing: para! contrm t (i) “A simple contract in writing diiiers from a spa laity ch fly in not eing under seal. A written contract is one wh n in all its terms. is in writing.

“A contract partly in writing and partly oral i . in l effect, an oral contract. it occurs where an inco p to writing, or one expressinr only a art of what i meant is by oral words rounded M0 the till contrar t. or whore there is first a written contract. and afterward it i ch ed orally.” Joel Prentiss Bishop, Commentaries on the Law of Contracts 55 163 64. at 60 (1887).

boutput contract. (1904) A contract in which a eiler promises to sup ily and a buyer to buy all the goods or services that a selller roduces during a spec ihed period and at a set price. 0 he quantity term is measured by the seller‘s output. An output contract assures the seller of a market or outlet for the period of the contract. Also termed entire-output contract. Cf. requirements contract.

p parol contract (pa-rohl or par-at). (18c) l. A contract or modification of a contract that is not in writing or is only partially in writing. -Also termed oral contract; parol agreement; (loosely) verbal contract. 2. At common law, a contract not under seal, although it could be in writing. -Also termed informal contract; simple contract. See PAROL-EVIDENCE RULE.

> pay-or-play contract. (1924) A contract in which one party agrees to perform and the other agrees to pay for the promised performance even if performance is never demanded. 0 Pay-or-play contracts are usu. made in the entertainment industry.

> performance contract. (1947) 1. A contract that requires a party to act personally and does not allow substitution. 0 People who provide unique personal services often make performance contracts. 2. A contract that allows the contractor to choose the means to achieve the end result. 0 The product’s specincations may be loose and allow the contractor latitude in deciding how to perform. Cf. build-to-print contract.

> personal contract. (17c) l. A contract that binds a person but not that person’s heirs or assignees because the contract requires a personal performance for which there is no adequate substitute. 2. A contract that binds a representative as an individual rather than binding the person or entity represented. O For instance, contracts made by a decedent’s personal representative traditionally bind the representative, not the estate, unless expressly agreed otherwise. 3. A real-property-related contract that is treated as personal property, not as a substitute for the real property. 0 Examples include oil-and-gas royalty contracts and property-insurance policies.

> pignorative contract (pig-na-ray-tiv). (18c) Civil law. A contract of sale in which the owner of real property, instead of relinquishing possession of the property that is theoretically sold, gives the counterparty a lien; a contract of pledge, hypothecation, or mortgage of realty. Cf. contract of pledge (2).

> precontract. (15c) A contract that precludes a party from entering into a comparable agreement with someone else. 0 Historically, a precontract was usu. a promise to marry. It formed an impediment to marriage with any person other than the promisee. The legal

impediment was extinguished and revived several time Until it was finally abolished in 1752 by 26 ( mi 2, ch 3; s 13. (.i‘. tartan or on PNT, BHTROTHAI (i) ’

‘principal contract. (1876) A contract giving me to an accessory contract, as an agreement from which secured obligation briglnntes. (J. accessory contract.

‘ private contract. (ibc) An agreement between pnv y, parties ailectlng only private rights.

5 procurement contract. (1942) A contract in which government receives node or services. 0 A procure ment contract, inclu ing the bidding rocess, is in subject to government regulation. A so termed gov crnment contract. See FEDERAL Acoumrion Reouu


*public contract. (17c) A contract that, although it involves public funds, may be performed by private persons and may benefit them.

> quasi-contract. See implied-in-law contract.

5 real contract. (17c) Hist. A contract in which money or other property passes from one party to another; a contract requiring something more than mere consent, such as the lending of money or handing over of a thing. 0 This term, derived from Roman law, referred to con. tracts concerning both personal and real property. Real contracts included transactions in the form of comma. datum, depositum, mutuum, and pignus. Cf. consensual contract.

“The essence of . . . the ,real contracts, was that, at the time the agreement was made, one party, by delivering something belonging to him to the other party to the contract, imposed on that other an obligation to return the thing itself or, in the case of things intended to be consumed, an equivalent in kind. As the Roman lawyers expressed it, the contractual obligation was created by something being handed over . . . .” R.W. Leage, Roman Private Law 292 (C.H. Ziegler ed., 2d ed. 1930).

“The term ‘real contract’ is in common use in the Civil law, and though not commonly used by judges or writers in the common law, nevertheless describes certain obligations enforced in England from very early times. A real contract is an obligation arising from the possession or transfer of a res.” 1 Samuel Williston, A Treatise on the Law of Contracts 58, at 19 (Walter H.E. Jaeger ed., 3d ed. 1957).

v reciprocal contract. See bilateral contract. r referral sales contract. See REFERRAL SALES CONTRACT.

> relative simulated contract. Civil law. A simulated contract that the parties intend to have some effects, but not necessarily those recited in the contract. La. Civ. Code art. 2027. See simulated contract.

> requirements contract. (1932) A contract in which a buyer promises to buy, and a seller to supply, all the goods or services that a buyer needs during a specified period. 0 The quantity term is measured by the buyer’s requirements. A requirements contract assures the buyer of a source for the term of the contract. Cf. output contract.

retail installment contract. (1935) A contract for the sale of goods under which the buyer makes periodic payments and the seller retains title to or a security interest in the goods. Also termed retail install meat contract and security agreement; conditional sales contract. Cf. chattel mortgage under MORTGAGE.

satisfaction contract. (1912) A contract by which one party agrees to perform to the satisfaction of the other. -Also termed contract to satisfaction.

7 sealed contract. See contract under seal.

r self-determination contract. (1978) Under the Indian Self-Determination and Education Assistance Act. an agreement under which the federal government provides funds to an Indian tribe and allows the tribe to plan and administer a Jrogram that Would otherwrsc be administered by the llederal government. 25 USCA § 450b(j).

, service contract. (1902) 1. A contract to (perform a service; esp., a written agreement to provi e mainte nance or repairs on a consumer product for a specrfied term. 2. See employment contract.

, severable contract. (1854) A contract that includes two or more promises each of which can be enforced sepa’ rately, so that failure to perform one of the promises does not necessarily put the promisor in breach of the entire contract. -Also termed divisible contract; several contract. See SEVERABILITY CLAUSE. Cf. joint contract.

“A severable contract . . . is one the consideration of which is, by its terms, susceptible of apportionment on either side, so as to correspond to the unascertained consideration on the other side, as a contract to pay a person the worth of his services so long as he will do certain work; or to give a certain price for every bushel of so much corn as corresponds to a sample.” Wharton’s Law Lexicon 215 (Ivan Horniman ed., 13th ed. 1925).

r shipment contract. (1893) A contract in which a seller bears the risk of damage to the items sold only until they are brought to the place of shipment. 0 If a contract for the sale of goods does not address the terms of delivery, it is presumed to be a shipment contract. UCC §§ 2-319, 2-504, 2-509. Cf. destination contract.

“In the jargon of commercial lawyers, a contract that requires or authorizes the seller to send the goods to the buyer but does not require that he deliver them at any particular destination is called a ‘shipment contract.’ Generally, in shipment contracts, risk of loss passes to the buyer at the point of shipment, which is also the point of ‘delivery,’ while in ‘destination contracts’ (seller must deliver at a particular destination) risk passes upon seller’s tender at destination.” 1 James J. White & Robert S. Summers, Uniform Commercial Code S 3-5, at 128-29 (4th

ed. 1995).

vsimple contract. 1. See informal contract (1). 2. See parol contract (2).

v simulated contract. (1817) Civil law. A contract that, by mutual agreement, does not express the true intent of the parties. La. Civ. Code art. 2025. 0 A simulated contract is absolute when the parties intend that the contract will impose no obligations; no obligations are enforceable on the parties by such a contract. A simulated contract is relative if the parties intend it to impose obligations different from those recited in the contract; the intended obligations are enforceable if all relevant conditions are met. A simulated contract may affect the rights of third parties. -Also termed simulation. See action en declaration de simulation under ACTION (4).

‘ special contract. (17c) I. See contract under seal. 2. A contract with peculiar provisions that are not ordinarily found in contracts relating to the same subject matter. 3. See express contract.

’ specialty contract. See contract under seal



standard-form contract. (1923) A usu. preprinted contract containing set clauses, used repeatedly by a business or within a particular industry with only slight additions or modifications to meet the specihc situa~ tion. 0 Because standard form contracts usu. favor the drafting party, they can amount to adhesion contracts. As with contract interpretation generally, courts offset the drafting arty’s advanta e by construing ambiguities ln the lig it least favorab e to the drafting party. See CONTRA PROFERENTEM. Often shortened toform contract. -Also termed standardized contract. See

adhesion contract.

“[U]niformity of terms in contracts typically recurring in a business enterprise is an important factor in the exact ca . culation of risks. Risks that are difficult to calculate can be excluded altogether. Unforeseeable contingencies affectin

performance, such as strikes, fire, and transportation di ficulties can be taken care of. . . . Standardized contracts have thus become an important means of excluding or controlling the [‘irrational factors’ that could persuade a court or jury to decide against a powerful defendant].” Friedrich

Kessler, Contracts of Adhesion -Some Thoughts About Freedom of Contract, 43 Colum. L. Rev. 629, 631-32 (1943).

b statutory contract. (1832) A contract for which a statute prescribes certain terms. 0 Statutes often govern the contracts made by public entities, but also some by private persons. For example, a statute may define and

set minimum standards for terms in home-improvement contracts.

> stock-option contract, (1945) A negotiable instrument that gives the holder the right to buy or sell for a specified price within a fixed time limit a certain number of shares of the corporation’s stock. See STOCK OPTION.

> subcontract. (18c) A secondary contract made by a party to the primary contract for carrying out the primary contract, or a part of it.

p subscription contract. See SUBSCRIPTION (3).

> substituted cdntract. (1833) A contract madebetween parties to an earlier contract so that the new one takes the place of and discharges the earlier one. 0 A substituted contract differs from a novation (as “novation” is traditionally defined) in that the latter requires the substitution for the original obligor of a third person not a party to the original agreement; when the obligee accepts the third party, the agreement is immediately discharged. In contrast to both substituted contract and novation, an executory accord does not immediately discharge an obligation; rather, the obligation is discharged on performance, often by a third person, rather than the original obligor. Cf. NOVATION; ACCORD (2).

“[A] substituted contract immediately discharges the prior claim which is merged into the new agreement. Consequently, in the absence of an express agreement to the contrary, the original claim can no longer be enforced. In the event of a breach, any action would have to be brought on the substituted agreement. . . . The concept of ‘substituted contract’ was created largely to circumvent the unsatisfactory rules that until recently governed executory accords. Now that these rules have been modernized, the next step should be the reabsorption of the substituted contract into the executory accord. . . . [T]he untidy distinction between executory accords and substituted contracts should not be allowed to complicate litigation about routine claim settlements.” John D. Calamari & Joseph M. Perillo, The Law of Contracts 5 21.6, at 803 (4th ed. 1998).

r supply contract. A buy-sell agreement under which the seller agrees to furnish good or services either for

a specified period of time or indefinitely. O A supply contract may specify quantities to be delivered at certain times, it may be a requirements or output contract, or it may specify indefinite quantities.

psynallagmatic contract (sin a-la -mat ik). [in Greek synallagma “mutual agreement” (1826) Civil law. A contract in which the parties obligate themselves recip focally, so that the obli ation of each party is correla’ tive to the obligation o the other. La. Civ. Code arts. 1908, 1911. O A synallagmatic contract is character ized by correlative obligations. whereas a commutative contract is characterized by correlative performances. The term synalla matic contract is essentially the civilv law equivalent 0 the common law’s bilateral contract. Cf. commutative contract.

y tacit contract. (17c) A contract in which conduct takes

the place of written or spoken words in the offer or acceptance (or both).

> take-it-or-leave-it contract. See adhesion contract.

> take-or-pay contract. (1960) A contract requiring the buyer to either purchase and receive a minimum amount of a product (“take”) or pay for this minimum without taking immediate delivery (“pay”). 0 These

contracts are often used in the energy and oil-and-gas industries.

> task-order contract. (1995) A contract under which a vendor agrees to render services or deliver products as ordered from time to time. 0 Governments use this type of contract when the quantities that will be needed or the times for‘performance are uncertain. The contract may describe the services or products generally, but it must specify the period of performance, the number of option periods, and the total minimum and maximum quantity of products or services that the government will acquire under the contract. When exercising its contractual rights, the government issues task orders to specify the product or service requirements, which may vary with each order. -Sometimes shortened to

task order.

p third-party-beneiiciary contract. (1921) A contract that directly benefits a third party and that gives the third party a right to sue any of the contracting parties for breach.

p tonnage contract. See CONTRACT OF AFFREIGHTMENT.

b turnkey contract. See engineering, procurement, and construction contract.

p unconscionable contract. See unconscionable agreement under AGREEMENT.

> unenforceable contract. (1842) An otherwise valid contract that, because of some technical defect, cannot be fully enforced; a contract that has some legal consequences but that may not be enforced in an action for damages or specific performance in the face of certain defenses, such as the statute of frauds. -Also termed

agreement of imperfect obligation. Cf. illegal contract; void contract.

“The difference between what is voidable and what is unenforceable is mainly a difference between substance and procedure. A contract may be good, but incapable of proof owing to lapse of time, want of written form, or failure to affix a revenue stamp. Writing in the first cases, a stamp in the last, may satisfy the requirements of law and render the contract enforceable, but it is never at any


time in the power of either arty to avoid the transaction, The contract is unimpeacha le, only it cannot be roved in court.” William R. Anson, Principles of the Law a Contract 19 20 (Arthur L. Corbin ed., 3d Am. ed. 1919).

“Courts are . . . fond of condemning the unenforceabl. agreement as ‘illegal.’ This is misleading insofar as it suggests that some penalty is necessarily imposed on on. of the parties, apart from the court’s refusal to enforce the agreement. In some cases, the conduct that renders the agreement unenforceable is also a crime, but this is not necessarily or even usually so. It is therefore preferable to attribute unenforceability to grounds of public policy rather than to ‘illegality.”‘ E. Allan Farnsworth, Contracts 5 5.1, at 323 (3d ed. 1999).

” unilateral contract. (1855) A contract in which onlyong Party makes a promise or undertakes a performance.

“[MJany unilateral contracts are in reality gratuitou; promises enforced for good reason with no element of bargain.” P.S. Atiyah, An Introduction to the Law 0] Contract 126 (3d ed. 1981).

“If A says to B, ‘If you walk across the Brooklyn Bridge i will pay you $100,’ A has made a promise but has not asked B for a return promise. A has asked B to perform, not a com. mitment to perform. A has thus made an offer looking to a unilateral contract. B cannot accept this offer by promising to walk the bridge. B must accept, if at all, by performing the act. Because no return promise is requested, at no point is B bound to perform. If B does perform, a contract involving two parties is created, but the contract is classi~ fied as unilateral because only one party is ever under an obligation.” John D. Calamari & Joseph M. Perillo, The Law of Contracts 5 2-10(a), at 64-65 (4th ed. 1998).

>Yalid contract. (17c) A contract that is fully operative In accordance with the parties’ intent. -Also termed valid agreement.

> variable annuity contract. (1959) Securities. An annuity whose payments vary according to how well the fund (usu. made up of common stocks) that backs it is per~

forming. SEC Rule 0-1(e)(1) (17 CFR § 270.0-1(e)(1)). See variable annuity under ANNUITY.

b verbal contract. See parol contract (1).

> voidable contract. (18c) A contract that can be aiiirmed or rejected at the option of one of the parties; a contract that is void as to the wrongdoer but not void as to the party wronged, unless that party elects to treat it as void. –Also termed voidable agreement. Cf. void contract.

“A voidable contract is a contract which, in its inception, is valid and capable of producing the results of a valid contract, but which may be ‘avoided,’ i.e. rendered void at the option of one (or even, though rarely, of both) of the parties.” P.S. Atiyah, An Introduction to the Law of Contract 37-38 (3d ed. 1981).

>void contract. (17c) l. A contract that is of no legal effect, so that there is really no contract in existence at all. 0 A contract may be void because it is technically defective, contrary to public policy, or illegal. -Also termed void agreement. Cf. illegal contract; unenforceable contract; voidable contract.

“Strictly speaking, a ‘void contract’ is a contradiction in terms; for the words describe a state of things in which, despite the intention of the parties, no contract has been made. Yet the expression, however faulty, is a compendious way of putting a case in which there has been the outward semblance without the reality of contract.” William R. Anson, Principles of the Law of Contract 18 (Arthur L. Corbin ed., 3d Am. ed. 1919).

“A valid contract is, of course, simply a contract of full force and effect, not vitiated in any way. A so-calied void contract, on the other hand, is really a contradiction in terms inasmuch as a contract has already been defined in

terms applicable only to a valid contract. However, tn: term is convenient and is universally used. For purposes of exposition, it is convenient to treat void contracts as falling, broadly speaking, into main care orles On the o a hand, are cases where one of the narma requirem nts for the creation of a contract is absent, while, on the other hand, are cases where all the normal req iiremenfs art satisfied, but the contract is void because the law (1 s p proves of its purpose or the terms by which it seeks to achieve that purpose. Typical examples of contrar is w r are Void because one of the normal requirements s abstare contracts in which the acceptance of an offer h s not been communicated or in which a promise is iven gr tuitously. Typical examples of contracts whlc are void because of their terms or objects are wagering contr cts, and contracts prejudicial to family relations.” P.S. At y n, An Introduction to the Law of Contract 36 37 (3d ed. 1981)

2, A contract that has been fully performed. Also termed discharged Contract.

“Not only is the term ‘void contract’ in itself techn’cal y inaccurate, but a contract is sometimes said to be void, not because it was destitute of legal effect from its commence“ ment, but because it has been fully performed, and so has ceased to have legal operation. It would be more proper to describe such a contract as ‘discharged.’” William R. Anson,

Principles of the Law of Contract 20 (Arthur L. Corbin ed., 3d Am. ed. 1919).

3, Loosely, a voidable contract.

“Again the word ‘void’ has been used, even by judges and the framers of statutes, where ‘voidable’ is meant. One illustration will suffice. By 17 Geo. III, c. 50, failure to pay certain duties at an auction is stated to make a bidding ‘nul and void to all intents,’ but this does not entitle a purchaser who has repented of his bargain to avoid the contract by his own wrong, that is by refusal to pay the statutory duty. The contract is voidable at the option of the party who has not broken the condition imposed by law.” William R. Anson, Principles of the Law of Contract 20~21 (Arthur L. Corbin ed., 3d Am. ed. 1919).

evoluntary contract. See gratuitous contract (2). r wagering contract. (18c) l. A contract made entirely for

sport, the performance depending on the happening of an uncertain event. See gambling contract.

“Although wagering and gaming agreements were generally enforceable under the English common law, they were condemned in most American states, in part because they were thought to encourage shiftlessness, poverty, and immorality, and in party because they were regarded as too frivolous to be worthy of judicial attention. lrwin v. Williar, 110 U.S. 499 (1884) (‘In England it is held that the contracts, although wagers, were not void at common law, . . . while generally, in this country, all wagering contracts are held to be illegal and void as against public policy.’)” E. Allan Farnsworth, Contracts 5 5.2 n.4, at 326-27 (3d ed. 1999).

2. A contract in which performance depends on a business transaction or outcome. 0 With this type of wagering contract, a business person is protected from a trade risk. 3. See aleatory contract.

>Written contract. (17c) A contract whose terms have

been reduced to writing.

“Written contracts are also commonly signed, but a written contract may consist of an exchange of correspondence, of a letter written by the promisee and assented to by the promisor without signature, or even of a memorandum or printed document not signed by either party. Statutes relating to written contracts are often expressly limited to contracts signed by one or both parties. Whether such a limitation is to be implied when not explicit depends on the purpose and context.” Restatement (Second) of Contracts S 95 cmt. c (1979) (citations omitted).

’ 6 -dog contract. See YELLOW-DOG CONTRACT.

contract, freedom of. See FREEDOM OF CONTRACT.

contract bond. Sec PERFORMANCE BOND. contract carrier. See private carrier under CA RRmR ( 1).

Contract Clause. Sec CONTRACTs (.LAUSE.

contract damages. Remedies available for a breach of contract. See compensatory damages, consequential damages, liquidated damages, punitive damages under DAMAGES; SPECIFIC PnRPORMANCB.

contract debt. See DEBT. Contract demurrage. See DEMURRACE (1).

contractee. (1875) Rare. A person with whom a contract is made.

contract for deed. See installment land contract under CONTRACT.

contract for sale. See CONTRACT. contract for services. See CONTRACT.

contract implied in fact. See implied-infact contract under CONTRACT.

contract implied in law. See implied-in-fact contract under CONTRACT.

contract in, vb. (1927) 1. To arrange for a person or company outside one’s own organization to come in and do a particular job <we contract in our janitorial services>. 2. To agree oflicially to take part in something <all members must contract in>.

contracting out, n. (1881) 1. The excluding by agreement of statutory provisions that would otherwise govern the terms or performance of contractual obligations. 2. OUTSOURCING. .

contracting state. (18c) A country that has consented to be bound by a treaty.

contract in restraint of trade. See CONTRACT. contract labor. See INDEPENDENT CONTRACTOR. contract loan. See add-on loan under LOAN.

contract manufacturing. (1955) The production of goods in accordance with the designs and specifications of a customer who then sells the product under its own brand. 0 In ordinary contract manufacturing, the customer does not furnish the raw materials. Cf. TOLL MANUFACTURING.

contract-market differential. The difference between the contract price and the market price at the place and time

of delivery.

contract not to compete. See covenant not to compete under COVENANT (1).

contract not to sue. See covenant not to sue under COVENANT

(1). contract of adhesion. See adhesion contract under CONTRACT.

contract of alfreightment (a-frayt-mant). (18c) Maritime law. An agreement for the carriage of goods by water, esp. by more than one voyage between specified ports over a specified period on payment for each voyage performed. 0 A contract of affreightment may employ a bill oflading, a charterparty, or both to ship the goods. -Abbr. COA; COA. -Also termed contract of carriage; tonnage contract. See CHARTERPARTY.

“When a shipowner, or person having for the time being as against the shipowner the right to make such an agreement, agrees to carry goods by water, or to furnish a ship for the purpose of so carrying goods, in return for a sum of money to be paid to him, such a contract is called a contract of affreightment and the sum to be paid is called freight. When the agreement is to carry a complete cargo of goods, or to furnish a ship for that purpose, the contract of affreightment is almost always contained in a document called a charterparty, the shipowner letting the ship for the purpose of carrying, or undertaking to carry, the charterer hiring the ship for such purpose, or undertaking to provide a full cargo.” William Lennox McNair, Alan Abraham Mocatta & Michael J. Mustill, Scrutton on Charterparties and Bills of

Lading 1 (17th ed. 1964).

contract of beneiicence. See gratuitous contract under CONTRACT.

contract of benevolence. See gratuitous contract under CONTRACT.

contract of carriage. See CONTRACT OF AFFRBIGHTMENT.

contract of employment. See employment contract under CONTRACT.

contract of guaranty. See GUARANTY (1).

contract of indemnity. See indemnity contract under CONTRACT.

contract 0f insurance. See INSURANCE POLICY.

contract of marriage. See marriage contract under CONTRACT.

contract of pledge. See CONTRACT. contract of record. See CONTRACT.

contract of sale. See contract for sale (1) under CONTRACT.

contract of service. (18c) 1. An agreement to enter into an apprenticeship.

b beneiicial contract of service. (1906) Archaic. A minor’s agreement to enter into an apprenticeship, historically binding the minor if it furnishes him or her with a means of livelihood, with the skills necessary to pursue an occupation, or with other beneficial experience.

2. See employment contract under CONTRACT.

contractor. (16c) l. A party to a contract. 2. More specif., one who contracts to do work for or supply goods to another; esp., a person or company that agrees to do

work or provide goods for another company <a rooting contractor>.

b competent contractor. (1854) A contractor who has the knowledge, skill, experience, and available equipment to do the work that he or she is employed to do without creating an unreasonable risk of injury to others and

who has the personal characteristics necessary to carry out the work.

> general contractor. (18c) Someone who contracts for the completion of an entire project, including purchasing all materials, hiring and paying subcontractors, and coordinating all the work. Also termed original con» tractor, prime contractor.

, independent contractor. See INDEPENDENT CONTRACTOR.

,, subcontractor. See SUBCONTRACTOR.

contract out, vb. (1894) 1. To arrange to have a job done by a person or company outside one’s own organization <we contracted out the catering to the deli downstairs>. 2. To 

agree oliicially not to take part in some system or scheme, such as a pension plan (we contracted out of Obamacare when it was still possible to do so>.

Contract rate. See INTEREST RATE. Contract right. See RIGHT.

Contracts Clause. (1875) Constitutional law. The clause of the U.S. Constitution prohibiting states from passing any statute that would impair rivate contractual Obll gations. O The Supreme Court as generally interpreted this clause so that states can regulate private contractual obligations if the regulation is reasonable and necessar to serve an important public purpose. U.S. Const. art. , S 10. cl. 1. -Also termed Contract Clause; Obligation of Contracts Clause.

Contract-specification defense. (1966) An affirmative defense that immunizes a contractor from liability for a defect in a product when the contractor has manufae tured or performed according to detailed contractual orders. 0 The defense applies to specialized, single-use components and protects a component supplier from claims of negligent design if the component conforms to the contractual speciiications -unless the speciiications are obviously dangerous. Under modern notions of strict liability, courts have increasingly rejected this defense. Cf. GOVERNMENT-CONTRACTOR DEFENSE; GOVERNMENT~ AGENCY DEFENSE.

contract system. Hist. The practice Of leasing prisoners out to private parties for the prisoners’ labor.

contract theory. (1870) l. The study Of the factors under~ lying the rationale for enforcing contractual obligations. 2. The study of how and why people and organizations construct and enter into legal agreements. 0 In this sense, contract theory draws on principles of financial and economic behavior.

contract to pledge. See CONTRACT.

contract to satisfaction. See satisfaction contract under CONTRACT. 1

contract to sell. See contract for sale (2) under CONTRACT. contractual bailment. See BAILMENT (I).

contractual duty. See DUTY (I).

contractual fault. See FAULT.

contractual indemnity. See INDEMNITY.

contractual limitation period. (1910) The contractually specified span of time within which any breach-of-contract lawsuit must be commenced, beginning when the breach occurs.

contractual obligation. See OBLIGATION. contractual right. See RIGHT.

contract uberrimaejidei. See CONTRACT. contract under hand. See CONTRACT. contract under seal. See CONTRACT.

contractus (kan-trak-tas). [Latin] Roman law. A contract; an agreement between two or more parties, usu. to create an actionable bond between them. See CONTRAHERE.

“The texts of the Roman Law do not supply a dehnition of contract. The words contractus –contrahere -like ‘contract’ in English, are used in various senses, sometimes wider, sometimes narrower. Labeo gives contractus the meaning of a reciprocal obligation, such as purchase 

and sale, hire, partnership. But when the Romans Speak of obligation arising from contract, they mean obligations arising from convention or agreement. In Roman law it was far from being the case that all agreements which might be expected to produce a legal obligation did so.” R.W. Lee, The Elements of Roman Law 285 (4th ed. 1956).

contractus bonaefidei, vel stricti juris (kan-trak-tas bob-nee fI-dee-I, vel strik-tI joor-I). [Latin] (17c) Roman law. A contract of good faith or of strict law; a contract requiring that the parties perform their duties in good faith. 0 In an action brought on a contractus bonae 156131; the plaintiff had to assert that he had not acted in bad faith. All consensual contracts were considered contractus bonaejidei. ‘lhe phrase was typically used when a remedy was being sought for a breach. Judges enforced contracts of good faith (e.g., contracts of sale) according to the requirements of good faith and contracts of strict law (e.g., stipulations) according to their strict terms. –Sometimes shortened to contractus bonaefidei.

contract zoning. See ZONING.


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[1]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black, Editor in Chief Bryan A. Garner. ISBN: 978-0-314-61300-4

[2]: William R. Anson, Principles of the Law of Contract 13 n.2 (Arthur L. Corbin ed., 3d Am. ed. 1919).

[3]: 1 Samuel Williston, A Treatise on the Law of Contracts 5 1, at 1-2 (Walter H.E. Jaeger ed., 3d ed. 1957) (footnote omitted).

[4]: John D. Calamari & Joseph M. Perillo, The Law of Contracts 5 1.1, at 3 (4th ed. 1998).

[5]: John D. Calamari & Joseph M. Perillo, The Law of Contracts 5 1.1, at 1-2 (4th ed. 1998):

[6]: John Edward Murray Jr., Murray on Contracts 5 2, at 5 (2d ed. 1974).

[7]: Sturges v. Crowninshield, 17 U.S. (4 Wheat) 122, 143 (1819).

[8]: “The U.C.C. Connection” by Howard Freeman:

[9]: John Quincy Adams, The Jubilee of the Constitution. A Discourse Delivered at the Request of the New York Historical Society, in the City of New York, on Tuesday, the 30th of April, 1839; Being the Fiftieth Anniversary of the Inauguration of George Washington as President of the United States, on Thursday, the 30th of April, 1789 (New York: Samuel Colman, 1839), p. 40.

[10]: John Locke’s Two Treatises of Government

[11]: Citizen’s Action Network, “Six Elements of a Legal Contract”:

[12]:  Ballantine’s Law Dictionary Legal Assistant Edition
by Jack Ballantine 
(James Arthur 1871-1949).  Doctored by Jack G. Handler, J.D. © 1994 Delmar by Thomson Learning.  ISBN 0-8273-4874-6.


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