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contract n

[Latin contractus from contrahere to draw together, enter into (a relationship or agreement), from com- with, together + trahere to draw]
1 : an agreement between two or more parties that creates in each party a duty to do or not do something and a right to performance of the other's duty or a remedy for the breach of the other's duty
: a document embodying such an agreement see also accept, bargain, breach, cause, consent, consideration, duty, meeting of the minds, obligation, offer, performance, promise, rescind, social contract, subcontract Uniform Commercial Code in the Important Laws section NOTE: Contracts must be made by parties with the necessary capacity (as age or mental soundness) and must have a lawful, not criminal, object. Except in Louisiana, a valid contract also requires consideration, mutuality of obligations, and a meeting of the minds. In Louisiana, a valid contract requires the consent of the parties and a cause for the contract in addition to capacity and a lawful object.

accessory contract
: a contract (as a security agreement) made to secure the performance of another obligation compare principal contract in this entry

ad·he·sion contract
: contract of adhesion in this entry

aleatory contract
: a contract in which either party's performance is dependent on an uncertain event

bilateral contract
: a contract in which both parties have promised to perform compare unilateral contract in this entry

commutative contract
in the civil law of Louisiana
: a contract in which the obligations of the parties to perform are equal to each other in value

constructive contract
: quasi contract in this entry

contract for deed
: land installment contract in this entry

contract implied in fact
: implied contract in this entry

contract implied in law
: quasi contract in this entry

contract of adhesion
: a contract that is not negotiated by the parties and that is usually embodied in a standardized form prepared by the dominant party

contract under seal
: a contract that does not require consideration in order to be binding but that must be sealed, delivered, and show a clear intention of the parties to create a contract under seal NOTE: Contracts under seal were in use long prior to the development of the requirement of consideration. They originally usually were impressed with an actual seal, but today the word seal, the abbreviation L.S., or words such as “signed and sealed” or “witness my seal” may take the place of the seal. Without a clear indication of the parties' intention, however, the presence of a seal, such as a corporate seal, is insufficient to create a contract under seal. Contracts under seal have a substantially longer statute of limitations than contracts based on consideration.

des·ti·na·tion contract
: a contract for goods stipulating that the seller assumes the risk of loss from damage to the goods until they arrive at the destination specified in the contract compare shipment contract in this entry

du·al contract
: one of two contracts made by the same parties with regard to the same transaction
: one of two contracts made with regard to the sale of real estate of which one states an inaccurately high price for the purpose of defrauding a lender into providing a larger loan

executory contract
: a contract that sets forth promises that are not yet performed

express contract
: a contract created by the explicit language of the parties compare implied contract in this entry

formal contract
: a contract made binding by the observance of required formalities regardless of the giving of consideration
: a contract that is a contract under seal, a recognizance, a letter of credit, or a negotiable instrument called also special contract specialty

forward contract
: a privately negotiated investment contract in which a buyer commits to purchase something (as a quantity of a commodity, security, or currency) at a predetermined price on a set future date called also forward

futures contract
: a contract purchased or sold on an exchange in which a party agrees to buy or sell a quantity of a commodity on a specified future date at a set price
: future called also future contract

gratuitous contract
in the civil law of Louisiana
: a contract in which one party promises to do something without receiving anything in return compare onerous contract in this entry

guaranteed investment contract
: an investment contract under which an institutional investor deposits a lump sum of money (as a pension fund) with an insurance company that guarantees the return of principal and a specific amount of interest at the end of the contract term
: such a contract considered as an investment [purchased a guaranteed investment contract] called also GIC

il·lu·so·ry contract
[i-lü-sə-rē-, -zə-]
: a contract in which at least one party makes an illusory promise

implied contract
1 : a contract that a court infers to exist from the words and conduct of the parties called also contract implied in fact implied in fact contract compare express contract in this entry
2 : quasi contract in this entry

implied in law contract
: quasi contract in this entry

informal contract
: any contract that is not a formal contract called also simple contract

innominate contract
in the civil law of Louisiana
: a contract that is given no special designation as to its purpose compare nominate contract in this entry

installment contract
: a contract in which performance is tendered in installments (as by separate periodic delivery of goods)

investment contract
: an agreement or transaction in which a party invests money in a common enterprise the profits from which are derived from the efforts of others

labor contract
: a contract between an employer and a labor union reached through and containing the results of collective bargaining
: collective bargaining agreement

land installment contract
: a contract for the purchase of real property in which the seller retains the deed to the property or otherwise continues to have an interest in it until the buyer makes payments in installments equal to the full purchase price or as much of the purchase price as agreed upon called also contract for deed land contract

maritime contract
: a contract directly relating to the navigation, business, or commerce of the high seas or other navigable waters and falling within the jurisdiction of the admiralty court

nom·i·nate contract
in the civil law of Louisiana
: a contract given a special designation (as sale, insurance, or lease) compare innominate contract in this entry

oner·ous contract
in the civil law of Louisiana
: a contract in which each party obligates himself or herself in exchange for the promise of the other compare gratuitous contract in this entry

option contract
: a contract in which a time period is specified within which an offer must be accepted

out·put contract
: a contract in which the buyer agrees to buy and the seller agrees to sell all of a kind of goods that the seller produces

principal contract
: a contract from which a secured obligation arises compare accessory contract in this entry

quasi contract
1 : an obligation that is not created by a contract but that is imposed by law to prevent the unjust enrichment of one party from the acts of another party called also contract implied in law implied in law contract
2 in the civil law of Louisiana
: a lawful and voluntary act that benefits another for which the law imposes an obligation on the beneficiary or a third party to compensate the actor compare offense

re·quire·ments contract
: a contract in which the seller agrees to sell and the buyer agrees to buy all of a kind of goods that the buyer requires

ship·ment contract
: a contract in which the seller bears the risk of loss from damage to the goods only until they are brought to the place of shipment compare destination contract in this entry

simple contract
: informal contract in this entry

special contract
1 : a contract containing provisions and stipulations not ordinarily found in contracts of its kind
2 : formal contract in this entry

sub·sti·tut·ed contract
: a contract between parties to a prior contract that takes the place of and discharges the obligations under the prior contract compare accord, novation

syn·al·lag·mat·ic contract
in the civil law of Louisiana
: bilateral contract in this entry

unilateral contract
: a contract in which only one party is obligated to perform compare bilateral contract in this entry

yellow-dog contract
: an illegal employment contract in which a worker disavows membership in and agrees not to join a labor union in order to get a job
2 : an insurance policy
3 : the study of the law regarding contracts usually used in pl.
vt 1 : to undertake or establish by a contract
2 : to purchase (as goods or services) on a contract basis often used with out
: to make a contract

Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.

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