Chapter 111 Parties to a Contract Promisor (Obligor) Promisee (Obligee) InsurerInsured ShipperCarrier Landlord (Lessor) Tenant (Lessee) VendorVendee General Parties to a Contract Parties to an Insurance Policy Parties to a Transportation Contract Parties Agreeing Upon Occupation of a Building for Money (a Lease) Parties to a Sales Contract Parties May Be: Individuals Partnerships Corporations Governments

Chapter 112 Classes of Contracts FORMAL INFORMAL contract under seal, contracts of record, negotiable instruments all other contracts IMPLIED EXPRESS spoken or written words created by law based on acts or conduct of parties VALID VOID bin d ing and enforceable without legal effect EXECUTOR Y EXECUTED completely performed something remains to be done VOIDABLE circumstances surrounding execution or lack of capacity allows rejection at option of one party BILATERAL VOID one promise given in exchange for another UNILATERAL only one party is obligated to perform after contract formation gives a right to one party to enter into a second contract at a later date

Chapter 113 Types of Contracts

Chapter 114 Contractual Liability Offer Communication Intent Acceptance Communication Intent Contract ExpressFormalExecutoryBilateral ImpliedInformalExecutedUnilateral Option First Refusal Unjust Enrichment No Contract Avoided Contract Void Agreement Quasi Contract

Chapter 115 Contract Parties This contract is executed between the Lookout Alarm system, herein called System, of 276 West Jackson Street, Phoenix, Arizona, and A.J. Armstrong, herein called Homeowner, of 737 Inwood Drive, Phoenix, Arizona InstallationSystem agrees to install a burglar alarm system at the above address of the homeowner, in accordance with the specifications that are attached hereto. PaymentHomeowner agrees to pay System for the above installation the sum of $4,863.00, $ being paid upon execution of this contract and the balance of $4, being paid within 90 days following satisfactory completion of the work by System. Lookout Alarm System by S.J. McRory S.J. McRory, President July 1, 2001 Date A.J. Armstrong July 1, 2001 Date } 1 1 } 2 } 3 4 5

Chapter 116 Chapter 11 Summary A contract is a binding agreement between two or more parties. A contract arises when an offer is accepted with contractual intent (the intent to make a binding agreement).

Chapter 117 Contracts may be classified in a number of ways according to form, the way in which they were created, validity, and obligations. With respect to form, a contract may be either informal or formal, such as those under seal or those appearing on the records of courts or administrative agencies. Chapter 11 Summary (cont.)

Chapter 118 Contracts may be classified by the way they were created as those that are expressed by words—written or oral—and those that are implied or deduced from conduct. The question of validity requires distinguishing between contracts that are valid; those that are voidable; and those that are not contracts at all but are merely void agreements. Chapter 11 Summary (cont.)

Chapter 119 Contracts can be distinguished on the basis of the obligations created as executed contracts, in which everything has been performed, and executory contracts, in which something remains to be done. The bilateral contract is formed by exchanging a promise for a promise, so each party has the obligation of thereafter rendering the promised performance. Chapter 11 Summary (cont.)

Chapter 1110 In the unilateral contract, which is the doing of an act in exchange for a promise, no further performance is required of the offeree who performed the act. The only obligation is that of the promisor. Chapter 11 Summary (cont.)

Chapter 1111 In certain situations, the law regards it as unjust for a person to receive a benefit and not pay for it. In such a case, the law of quasi contracts allows the performing person to recover the reasonable value of the benefit conferred on the benefited person even though no contract between them requires any payment. Chapter 11 Summary (cont.)

Chapter 1112 Unjust enrichment, which a quasi contract is designed to prevent, sometimes arises when there was never any contract between the persons involved or when there was a contract, but for some reason it was avoided or held to be merely a void agreement. Quasi- contractual recovery is not allowed merely because someone loses money. Chapter 11 Summary (cont.)