Contract Formation | CPA Exam REG | Business Law

In this video, I discuss the various contract formation such as: Express Contract, Implied-in-Fact, Contract, Implied-in-Law Contract or Quasi-Contract, Unliteral Contract, Bilateral Contract.
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A contract is a legally enforceable promise, and there are different methods for forming one:
Express Contract: This type of contract is formed through explicit language, either spoken or written. For example, if Ann agrees to pay Barb $10 for washing her car, this is an express contract.
Implied-in-Fact Contract: This contract is formed through actions rather than words. For instance, if Alex visits a doctor, explains his symptoms, and the doctor treats him, a contract for the doctor's services is implied by their actions, even though no specific agreement was verbally or in writing made.
Implied-in-Law Contract or Quasi-Contract: This isn't actually a contract but a legal remedy. It's used when someone receives a benefit unfairly, without a formal agreement, and justice demands they compensate for it. This prevents "unjust enrichment" where one party benefits at another's expense without an agreement.
A bilateral contract is a key type of contract, characterized by mutual promises made by each party to the other. In this kind of contract, both parties are both promisors (making promises) and promisees (receiving promises). Here's how it relates to the different methods of contract formation:
Express Bilateral Contract: An express bilateral contract is formed when the terms are clearly stated by the parties, either orally or in writing. For example, if Leo agrees to sell his car to Mia for $10,000 and Mia agrees to buy it, this creates an express bilateral contract. Both parties have made explicit promises to each other.
Implied-in-Fact Bilateral Contract: This occurs when the terms of the contract are implied through the actions or conduct of the parties, indicating mutual assent. For instance, if a client sits for a portrait and the artist begins painting, an implied-in-fact bilateral contract is formed. The client's action of sitting implies consent to pay for the portrait, and the artist's action of painting implies consent to create the portrait.
Implied-in-Law (Quasi-Contract) and Bilateral Contracts: While an implied-in-law contract or quasi-contract is not a true contract, it can interact with the concept of bilateral contracts. In quasi-contractual situations, the law imposes an obligation as if there were a contract to prevent unjust enrichment. However, these are not bilateral contracts because they lack mutual assent and express or implied promises between the parties.
In emphasizing bilateral contracts, it's important to understand that they are fundamentally about reciprocal promises. Whether these promises are made explicitly (as in express bilateral contracts) or implied by actions (as in implied-in-fact bilateral contracts), the essence of a bilateral contract is the exchange of promises between two parties.
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