“An agreement is regarded as a contract when it is enforceable by law”

Introduction:

A contract is a legally enforceable agreement between two or more parties with mutual obligations. The remedy at law for breach of contract is “damages” or monetary compensation. In equity, the remedy can be specific performance of the contract or an injunction. Both remedies award the damaged party the “benefit of the bargain” or expectation damages, which are greater than mere reliance damages, as in promissory estoppe.

If jurisdiction in the case is in personam or quasi in rem (over a person or property or a debt owed by a person), the court may not exercise that jurisdiction unless the defendant has “minimum contacts” with the state in which the court sits (the forum state). Generally, the requirement of minimum contacts means that the defendant has to have taken actions that were purposefully directed towards the forum state. Such actions may include, among others, selling goods in the state, being incorporated in the state, visiting the state, or bringing property in the state. In order to exercise jurisdiction, such minimum contacts are required by the defendant’s Fourteenth Amendment federal constitutional right to due process. Even if the defendant’s miniumum contacts with the forum state are found to exist, the court will not exercise jurisdiction if considerations of “fair play and substantial justice” would require making the defendant defend in the forum state so unreasonable as to constitute a due process violation.

Minimum contacts can consist of either some type of systematic and continuous contact with the forum (“general jurisdiction”), or isolated or occasional contacts purposefully directed toward the forum (“specific jurisdiction”). A single contact can suffice to establish personal jurisdiction, but where jurisdiction is based on a single contact, the nature and quality of the contact is determinative. The principal test of foreseeability in a due process analysis “is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate the possibility of defending a suit in the forum. A defendant cannot reasonably anticipate out-of-state litigation unless he has purposefully availed himself “of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws

Contract Act 1872 (Act No. IX of 1872) governs the law of contracts in Bangladesh. The Act came into force in Bengal on 1 September of 1872, and was adopted in Bangladesh without change. It contains the common rules relating to contracts and differentiates them. The Act has 238 sections under its 11 chapters. It begins with the preliminary aspects, including a short preamble and title, extent and date of commencement and interpretation of words and expressions used in the act.

1) http://en.wikipedia.org/wiki/Contract

2) http://www.banglapedia.org/httpdocs/HT/C_0344.HTM

3) http://definitions.uslegal.com/m/minimum-contacts/

Offer and acceptance:

The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. This can be called a concurrence of wills or consensus ad idem (meeting of the minds) of two or more parties. The concept is somewhat contested. The obvious objection is that a court cannot read minds and the existence or otherwise of agreement is judged objectively, with only limited room for questioning subjective intention: see Smith v. Hughes.^[3] Richard Austen-Baker has suggested that the perpetuation of the idea of ‘meeting of minds’ may come from a misunderstanding of the Latin term ‘consensus ad idem’, which actually means ‘agreement to the [same] thing’.^[4] There must be evidence that the parties had each from an objective perspective engaged in conduct manifesting their assent, and a contract will be formed when the parties have met such a requirement.^[5] An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to form a contract.

The case of Carlill v Carbolic Smoke Ball Company is an example of a ‘unilateral contract‘. Obligations are only imposed upon one party upon acceptance by performance of a condition ^[^{disambiguation needed}^]. In the United States, the general rule is that in “case of doubt, an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.”^[6]

Offer and acceptance does not always need to be expressed orally or in writing. An implied contract is one in which some of the terms are not expressed in words. This can take two forms. A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a checkup, a patient agrees that he will pay a fair price for the service. If one refuses to pay after being examined, the patient has breached a contract implied in fact. A contract which is implied in law is also called a quasi-contract, because it is not in fact a contract; rather, it is a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. For example, a plumber accidentally installs a sprinkler system in the lawn of the wrong house. The owner of the house had learned the previous day that his neighbor was getting new sprinklers. That morning, he sees the plumber installing them in his lawn. Pleased at the mistake, he says nothing, and then refuses to pay when the plumber delivers the bill. Will the man be held liable for payment? Yes, if it could be proven that the man knew that the sprinklers were being installed mistakenly, the court would make him pay because of a quasi-contract. If that knowledge could not be proven, he would not be liable. Such a claim is also referred to as “quantum meruit“.

Types of Contracts in Business Law:

Express Contracts
In this type of contract, the parties to the contract state the terms and conditions either by word of mouth or in writing, at the time of forming the contract. A definite written or oral proposal of the contract is accepted by an offeree in a way that explicitly defines legal consent to the terms of the contract.

Implied Contracts
Contracts implied in fact and contracts implied in law are both a part of implied contracts. But a real implied contract consists of certain obligations that arise from a mutual agreement and intention of promise, which is not expressed verbally. An implied contract cannot be labelled as implied in law because such a contract lacks the requirements of a true contract. The term “Quasi Contract“, is however, a more specific identification of contracts implied in law. Implied contracts depend on the reason behind their existence. Thus, for an implied contract to develop, there must be some transaction, act or conduct of a party in order for them to be legally bound. A contract will not be implied if there are any chances of harm or inequity. If there is no clarity of communication, implication and understanding between the two parties, the court will not conclude any contractual relationship between the two parties. If the parties continue to follow their contractual terms, even after the contract has ceased to exist, an assumption arises that the two parties have mutually agreed to a new contract that has same provisions as the old contract and a new implied contract is formed.

Executed Contracts
An executed contract is termed as an agreement in which no other transaction is left out to be executed by either party. This definition could be incorrect to a certain extent, since completion of work will mean that the contract has ended. But in case of executed contracts, there exists some act/transaction or an obligation that has to be performed at some point of time in the future according to the contractual terms.

Bilateral and Unilateral Contracts
If two entities exchange a mutual and reciprocal promise that implicates the execution of an act, an obligation or a transaction or forbearance from execution of an act or an obligation, with respect to every party involved in the contract, is termed as bilateral contract in the language of law. It is also called a two-sided contract because of the two-way promises made by parties involved in the contract.

A unilateral contract is a promise made by only one party. The offerer promises to execute a certain act or an obligation if the offeree agrees on performing a requested act that is understood as a legally enforceable contract. It just requires an acceptance from the other party to get the contract executed. Thus, this is a one-sided contract since only the offerer is bound to the court of law. One important point of this type of contract is that, the offeree cannot be sued for refraining, abandoning or even failing to execute his act, since he does not promise anything.

Aleatory Contracts
A mutual agreement which comes into effect only in case of an occurrence of an uncertain event or a natural calamity, is termed as an aleatory contract. In this type of contracts, both the parties may assume risks. For example, a fire insurance policy or a travel insurance is a type of aleatory contract as the policy holder will not receive any benefits of the contract unless in an event of fire occurrence or a plane crash (in case of travel insurance).

Unconscionable Contracts
Unconscionable contracts are those that are unfair and unduly one-way favors of the party who stand at a superior end of the bargaining power. The word ‘unconscionable’ means an insult to justice and decency. No mentally healthy and honest person would ever accept an unconscionable contract and enter into it. Unconscionability of the contract is determined by analyzing the situations and circumstances of the parties involved in the contract, when the contract was made. This doctrine is applied only in cases, in which it would be unjust or an affront to the integrity of the law system to enforce a contract like that. The court of law have found that unconscionable contracts are a result of exploitation of illiterate and impoverished consumers.

Adhesion Contracts
Adhesion contracts are the ones that are drafted by a party who has a larger advantage in bargaining. This means that the party who has a bargaining advantage leaves the other party with no other option than to either accept the contract or to reject it. Commonly known as “take-it or leave-it” contracts, they are often considered because for most of the businesses, it is difficult to negotiate and bargain all the terms and conditions of every contract. It is not necessary that all adhesion contracts are unconscionable contracts, since in some cases it is quite coincident for one party to have a superior bargaining advantage leaving no option for the other party. This often happens in monopolistic markets. However, courts of law, refuse to implement such contracts of adhesion on the grounds that there was no mutual understanding or an acceptance between the two parties involved in an adhesive contract.

Void and Voidable Contracts
A void contract implies that the involved parties are not liable to any legal obligations or rights, meaning that the parties are not legally bound with reference to that contract. In fact, a void contract means a contract has ceased to exist and that there is no contract existing between the two parties.

A voidable contract, on the other hand, is an agreement between any two or more parties, that has a legal binding. A voidable contract can be treated as never been legally bound on a party that has been a victim of fraudulent execution or if that party was suffering from any legal disability. Also, a contract is not void unless and until any of the involved parties, choose to treat it as a void contract by confronting its implementation. You may also like to read on:

So with these legal information on the types of contracts, I sign off by wishing you all the very best for your business ventures.

1) http://www.buzzle.com/articles/types-of-contracts.html

Summary of important issues for contract:

Written contracts

If the contract has been formally written and signed by the parties, there is an assumption that all the terms of the agreement are contained in the written document regardless of what may have been verbally agreed.
Contracts can be a combination of written and verbal agreements when the written agreement itself covers very few terms.
When a contract is signed, it is assumed that all the terms have been read and agreed to.
If unsigned, a written contract must:
- Be presented to and understood by all parties to be valid
- Be recognised by all parties as a contract, that is, it must look like a contract and not simply a receipt or docket.

Verbal agreements

Verbal agreements rely on the good faith of all the parties and can be difficult to prove.
Conversely, in some situations, insisting on a detailed written agreement may be counter-productive if:
- The value of the transaction is not particularly high
- The presentation of a substantial document, possibly with many provisions, may raise more questions and uncertainty in the minds of the parties than it resolves, ending in the transaction not proceeding. If you are confident of the good faith of the party, a less intimidating form of written arrangement may be the best course of action.
Do not automatically think that because it is not in writing, it can never be proved. Verbal agreements can be supported by:
- The conduct of the other party both before and after the agreement
- Specific actions of the other party
- Past dealings with the other party.

1) http://www.innovation.gov.au/SMALLBUSINESS/WORKINGWITHCONTRACTS/Pages/ContractTypes.aspx

Land Contract Law:

A land contract is essentially an installment payment arrangement for purchasing land. It is also known as a contract for deed or installment contract. It is an agreement for the purchase of real property in which the payment of all or a portion of the purchasing price is deferred.

The purchase price may be paid in installments over the period of the contract, with the balance due at maturity. When the buyer completes the required payments, the seller must deliver valid legal title by way of a deed. During the period of the contract, the buyer makes installment payments on the purchase price and is entitled to possession and equitable title to the property. The seller retains legal title and continues to be liable for payment of any underlying mortgage or loans.

The buyer may assign and convey his/her interest as long and it doesn’t result in impairment of seller’s position. Any assignment or conveyance will not release the buyer from obligations under the contract unless the seller specifically releases the buyer in writing.

What You Should KnowAbout

LAND CONTRACTS

You are reading this pamphlet because you eitherwant to buy a home and be able to make payments,are having problems with an existing land contract,or just want to know more about land contracts. Thispamphlet is not a substitute for legal advice. We urgeyou to consult with an attorney if you have anyquestions about, or before entering into orcancelling, a land contract. If you are low-income or a senior citizen,

What Is a Land Contract?

1. A Land Contract is an agreement by a Seller to sell you land and a house on that land (in the state of Ohio) for an agreed price. A mobile home can be sold on Land Contract only if it is affixed to (that is, a part of) the land being bought.

2. You agree to make installment payments or monthly payments of the agreed price, plus interest, until paid in full.

3. The Seller agrees to transfer the deed to you after all of the payments have been made.

What Isn’t a Land Contract?

1. Leases with an option to purchase real property or rentto- buy agreements are not Land Contracts. These are screwy legal deals. If you have one, talk to a lawyer.

2. Under Ohio law, the Land Contract must be for a home and the property the home sits on, not just land. It can be for a mobile home only if the mobile home is affixed to (that is, a part of) the land.

3. You cannot use a Land Contract to buy just a mobile home without the land. To buy a mobile home on Land Contract, the mobile home must have been made part of H5-3

the land by the Auditor. If you think you have bought just a mobile home on a Land Contract, talk to a lawyer.

Who Is Who?

“Buyer” or “vendee” is the individual(s) buying on Land Contract. “Seller” or “vendor” is the owner of the property selling it to a Buyer on Land Contract.

What Law Governs?

Land installment contracts are regulated by Ohio Revised Code Chapter 5313.H5-4

Questions to Ask Yourself Before

You Enter into a Land Contract

• Who owns the property? Does the person trying to sell me the property really own it? Ask to see the deed.

Are there any other Land Contracts on the property? Will you get clear title? Go to the County Recorder’s Office to find out.

• Is there a mortgage on the property? Check the mortgage records at the Recorder’s Office of the county in which the property is located.

• If you buy the property on Land Contract, you will have to make all repairs that are needed on the property after you make an agreement.

• What is the condition of the property? What sort of repairs am I going to have to do? Can I afford them?

• Walk through the property carefully. INSPECT IT! Get an inspector to look at it. Look for leaks, mold, and termites. How old are the furnace, roof, pipes, and septic system? Talk to people who lived there before. If the Seller says something about the property’s condition, get it in writing, as part of the contract. If the Seller will not put it in writing, be very wary or

suspicious.H5-6

• Check with the Seller—you may be responsible for taxes on the property and homeowner’s insurance. Will you be able to afford these and a monthly payment? Ask the County Auditor if there are any unpaid taxes on the property.

• Can I afford payments and pay taxes, insurance and repairs on my income? What may have been a bargain may turn into a nightmare.

• How much of a down payment is expected? If I move, will I get any money back? Do I have the money?

• Who is drawing up the papers? What costs will be involved? Get a copy of all papers to review

BEFORE signing.

• Where will the Land Contract be recorded? If you are told that it will not be recorded, do not sign. The law

requires Land Contracts to be recorded!

• Before you sign any contract, you should contact an attorney to review the paperwork.

• Walk away and think about it. If it is too good to be true, it is.

Land Contract should be in writing

TIP

What about the down payment? Unless you and the Seller agree otherwise, you will not get your down payment back if you do not pay the Land Contract. If you pay more than 20%, or have been paying for five or more years, you may get some money back.

What Should Be Contained in a Land Contract?

Every Land Contract should be signed (the legal term is “executed”) in duplicate (two copies), and a copy of the contract given to both the Seller and to you (the Buyer). At a minimum, the following should be included in a land installment contract:

• the names and current mailing addresses of all parties to the contract;

• the date the contract was signed by both parties;

• a legal description of the property to be sold;

• the contract price of the property;

• any charges or fees for service that are included in the contract separate from the contract price;

• the amount of the Buyer’s down payment;

• the principal balance owed;

• the amount and due date of each installment payment;

• the interest rate on the unpaid balance and the method of computing the rate;

• a statement of any encumbrances against the property conveyed;

• a statement requiring the Seller to deliver a general warranty deed on completion of the contract, or another deed that is available when the Seller is legally unable to deliver a general warranty deed;

• a provision that the Seller provide evidence of title;

• a provision that, if the Seller defaults on any mortgage on the property, the Buyer can pay on that mortgage and receive credit on the land installment contract;

• a provision that the Seller shall cause a copy of the contract to be recorded;

• a requirement that the Buyer be responsible for the payment of taxes, assessments, and other

charges against the property from the date of the contract, unless agreed to the contrary; and

• a statement of any pending order of any public agency against the property.

What If My Land Contract Does Not Have These Terms?

Ohio courts have upheld Land Contracts which do not meet all of the above terms. Courts generally will look at the intent of the parties. Did the parties intend to have a Land Contract? That is why a written contract which contains all of the legal requirements is important. If you are in any doubt, consult with a lawyer. If you are a senior or lowincome,

call your local Legal Services, 1-866-LAW-OHIO

(1-866-529-6446).

H5-10

What the Law Says a Seller Can’t Do

• A Seller cannot sell property by Land Contract if the Seller owes more on a mortgage on that property than the balance due under the Land Contract. EXCEPTION: a mortgage that covers more property than just the real property sold on Land Contract to the Buyer is acceptable if the Seller has made prior written disclosure to the Buyer of the amount of the mortgage.

• A Seller cannot put a mortgage on property being sold by Land Contract during the Land Contract in an amount BIGGER than the balance due on the contract without the consent of the Buyer.

What the Law Says a Seller Must Do

• Every Seller must, at least once year or upon your demand, (but no more than twice a year), give you a statement showing the amount paid in principal, amount paid in interest, and the remaining balance owed.

• The Seller must RECORD the Land Contract in the County Recorder’s Office where the property is located within 20 days of signing, and it shall contain the legal

description of the property. If the Seller does not record it, you should record it to protect your interest.

If I Do Not or Cannot Pay on My Land Contract, What Happens?

• If you fail to make a payment or fail to comply with other terms of the Land Contract for 30 days, you may lose your rights to remain in the property.

• If, before those 30 days are up, you make all payments currently due under the contract, pay any fees and charges which you owe under the Land Contract, and

begin complying with all other terms, you should not lose the property.

• If, at the end of the 30-day period, you are still behind in your payments, fees or charges owed under the Land Contract, or are not complying with all other terms, the Seller must give you a WRITTEN NOTICE if the Seller wants to end the Land Contract. The notice must

include:

1. an indication that there is a Land Contract and the address of the property;

2. a reason(s) for ending the contract; and

3. a statement that the Buyer has ten days to correct the problem.

• This notice must be served by the Seller by handing you a written copy of the notice, by leaving it at the property which is the subject of the Land Contract, or by mailing it to you by registered or certified mail to your last known address.

If you get this notice, call Legal Services:

1-866-LAW-OHIO (1-866-529-6446)

What Next?

• After the ten-day notice period, the Sellercan file court action if you have not

corrected the default and complied with the contract. There are two (2)

possibilities:

1. If the contract has been in effect for less than five years, or less than 20% of the principal

amount due has been paid, and you have been in default for over 30 days, an eviction action

against you can be filed just like a landlord evicting a tenant. If this happens, you could

lose your down payment You must receive notice as explained above first.

H5-13

2. If you have paid under the Land Contract for five years or more from the date of the first payment, or have paid toward the purchase price a total sum equal to or more than 20% of the contract price, the Seller may recover the property only by use of

FORECLOSURE and judicial sale of the property.

What Is a Foreclosure?

If you have paid more than 20% of the contract price, or the Land Contract has

been in force for five years and you have been paying, the Seller must FORECLOSE. This

means that a legal action is filed and if you lose, the property is sold. If the property is

sold for more than what is owed on your Land Contract, you will get what is left.

That is why it is important not to just walk away or move out if you get a notice. You

have valuable rights. You should contact alawyer.

H5-14

What If I Made Improvements or Repairs?

You may be able to get reimbursed the value from the Seller for improvements or repairs made to the property. You may have to go to court to do that. You should keep all receipts for the work done and materials bought. You may want to consider adding reimbursement for the costs of repairs and improvements to your Land Contract. You should contact a lawyer regarding your rights.

What You Need to Know about Lead Paint

Lead poisoning is having too much lead in the body. Lead poisoning is a serious health

problem that affects people’s minds and bodies. Children under age six and unborn

children are at the greatest risk of harm from lead poisoning because their bodies and

nervous systems are still developing. If the home you are considering buying on Land Contract was built before 1977 and you want to know if the house contains lead paint, you should contact your local Health Department to have the home tested. Ask the Seller if

there is lead paint. Look for chipping paint and dust. Lead can also be in the dirt around the house. Lead poisoning is serious. Do not agree to buy a house which has lead paint. If the Seller refuses to give you the required lead paint notice, walk away.

Things to Keep in Mind

°A Land Contract that does not contain all of the terms required by Ohio law can still be

good. You should contact an attorney. If you cannot afford an attorney, contact your

local Legal Services.

°A written contract protects both the Buyer and the Seller. It helps the Buyer to make more informed decisions. And it helps both parties to know their rights.

Read before you sign.

°Oral Land Contracts can sometimes be valid, BUT SHOULD BE AVOIDED. You should contact an attorney or your local Legal Services immediately if you think that you have this type of Land Contract.

°When reviewing a written instrument, courts must look to what the parties thought they were getting—the intent should be gathered from the written language.

°If the contract is not clear, the contract is interpreted against the party who wrote the contract.

°Record your Land Contract to protect your rights.

A LAND CONTRACT SHOULD BE IN WRITING

This pamphlet prepared by and distributed by

Southeastern Ohio Legal Services

1-800-589-5888

P:\7-Publications\Pamphlet\lndcont h5.wpd February 2, 2004

H5-1

Conclusion of the Contrac :

1. The contract shall be regarded as concluded, if an agreement has been achieved between the parties on all its essential terms, in the form proper for the similar kind of contracts. As essential shall be recognized the terms, dealing with the object of the contract, the terms, defined as essential or indispensable for the given kind of contracts in the law or in the other legal acts, and also all the terms, about which, by the statement of one of the parties, an accord shall be reached.
2. The contract shall be concluded by way of forwarding the offer (the proposal to conclude the contract) by one of the parties and of its acceptance (the acceptance of the offer) by the other party.

The contract shall be recognized as concluded at the moment, when the person, who has forwarded the offer, has obtained its acceptance.
2. If in conformity with the law, the transfer of the property is also required for the conclusion of the contract, it shall be regarded as concluded from the moment of the transfer of the corresponding property (Article 224).
3. The contract, subject to the state registration, shall be regarded as concluded from the moment of its registration, unless otherwise stipulated by the law.

1. The contract may be concluded in any form, stipulated for making the deals, unless the law stipulates a definite form for the given kind of contracts. If the parties have agreed to conclude the contract in a definite form, it shall be regarded as concluded after the agreed form has been rendered to it, even if the law does not require such form for the given kind of contracts.
2. The contract in written form shall be concluded by compiling one document, signed by the parties, and also by way of exchanging the documents by mail, telegraph, teletype, telephone, by the electronic or any other type of the means of communication, which makes it possible to establish for certain that the document comes from the party by the contract.