Free reference·Business Concepts

Contracts

Basic elements, scope of work, specifications. What makes a contract enforceable.

The hook

A contract is a legally enforceable agreement. The pieces that matter: the basic elements (offer, acceptance, consideration, capacity, legality), the difference between unilateral and bilateral, and what makes scope/deliverables/fee defensible.

Memorize these

Concepts that show up on the exam

Offer
A definite proposal to enter into a contract on stated terms. Must communicate intent to be bound.
Acceptance
Unconditional agreement to the offer's terms. A counteroffer rejects the original and creates a new offer.
Consideration
Something of value exchanged by each party (money for services). Without consideration there's no enforceable contract.
Capacity
Legal ability to enter a contract. Minors, mentally incapacitated persons, intoxicated persons may lack capacity.
Legality
Both the purpose and the means must be legal. A contract for an illegal survey is unenforceable.
Statute of frauds
Requires certain contracts to be in writing — including those involving real estate. State-specific list.
Scope of work
The detailed description of what will be done. The most often-litigated part of a survey contract.
Liquidated damages
Pre-agreed dollar amount for specific breaches (e.g., late delivery). Enforceable if reasonable; courts strike unreasonable penalty clauses.
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