Understanding Contracts
Definition: Contracts are legally binding agreements that outline terms and responsibilities.
Key Components:
- Agreement: Offer and acceptance.
- Consideration: Exchange of value (money, goods, or services).
- Capacity: All parties must be mentally capable and of legal age.
- Legality: The agreement must involve lawful activities.
Types of Common Contracts
Lease Agreements: Contracts between landlords and tenants outlining rent, duration, and eviction terms.
Employment Contracts: Define salary, job responsibilities, benefits, and termination conditions.
Loan Agreements: Cover borrowing terms, interest rates, and repayment schedules for loans like car or student loans.
Insurance Policies: Agreements detailing premiums, coverage terms, and claims processes for health, car, or life insurance.
Service Agreements: Define expectations for services (e.g., internet, utilities) and clarify costs and responsibilities.