Contract Basics



agreement or assent to an offer; represents a meeting of the minds between parties to a contract

adhesion contract

"take it or leave it" contract, such as an insurance contract, where the one drafting the contract has the negotiating power. The nondrafting party must sign or seek services elsewhere.


legal concept where a party to a contract transfers their rights, duties, and obligations under the contract to another person

bilateral contract

contract that involves two parties who each agree to do something for the other


something of value that is bargained for and exchanged for the promise of the other party in a contract


legally binding obligation between two or more parties that is enforceable under the law


transfer of a contractual obligation to another person. Original parties to the contract remain the same.

express contract

contract that is explicit on its face—clear and in plain words

implied contract

contract that is not explicitly entered into but is rather implied in fact and in law; also referred to as a quasi contract


presentation of goods or services to someone for the party to accept or reject

parol evidence rule

principle in the law that limits the interpretation of the content and meaning of a contract to what is contained in the actual contract itself

promissory estoppel

legal principle that an agreement can be enforceable even without formal consideration if one party makes a promise that the other party relied on to their detriment

unconscionable contract

contract with extremely one-sided or unfair terms, such as an extremely high interest rate

unilateral contract

contract where one party agrees to do something if a condition is fulfilled but without a mutual promise

unjust enrichment

occurs when one person is enriched at the expense of another in circumstances that the law sees as unjust

void contract

contract that is not legally binding because it lacks an essential element or because it is illegal or against public policy

voidable contract

contract that is valid but can be voided if the nonbreaching party so chooses