{"id":2902,"date":"2023-02-19T16:11:06","date_gmt":"2023-02-19T16:11:06","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/what-is-a-contract\/"},"modified":"2025-05-20T18:25:55","modified_gmt":"2025-05-20T18:25:55","slug":"what-is-a-contract","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/what-is-a-contract\/","title":{"raw":"Learn It 5.4.1: What Is a Contract?","rendered":"Learn It 5.4.1: What Is a Contract?"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what a contract is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what a contract is<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the four parts of a contract&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the four parts of a contract<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand when a contract is breached and what you can do about it&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand when a contract is breached and what you can do about it<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand warranties&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand warranties<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Contracts<\/h2>\r\n<p>&nbsp;<\/p>\r\n<p>A <strong>contract<\/strong> is an agreement that between parties that contains details about the performance of a specified action. The contract creates a legal obligation and can be enforced in a court of law. Contracts are an important part of doing business. Some of the business transactions that involve contracts are buying materials and real estate, selling goods, leasing equipment, hiring consultants, and renting office space.<\/p>\r\n<section class=\"textbox keyTakeaway\">\r\n<h3>express vs. implied contract<\/h3>\r\n<ul>\r\n\t<li>An <strong>express contract<\/strong> is formed with specific written or spoken words.<\/li>\r\n\t<li>An <strong>implied contract<\/strong> is formed as a result of the actions of the parties that show agreement.<\/li>\r\n<\/ul>\r\n<\/section>\r\n<p>An example of an express contract is the written sales contract that you sign when you go to a car dealership to buy a car. An implied contract exists when you go to the supermarket to buy groceries. You and the supermarket have an implied contract that you will pay the displayed prices for the goods that you take from the shelves.<\/p>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"300\"]3890[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what a contract is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what a contract is<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the four parts of a contract&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the four parts of a contract<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand when a contract is breached and what you can do about it&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand when a contract is breached and what you can do about it<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand warranties&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand warranties<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>Contracts<\/h2>\n<p>&nbsp;<\/p>\n<p>A <strong>contract<\/strong> is an agreement that between parties that contains details about the performance of a specified action. The contract creates a legal obligation and can be enforced in a court of law. Contracts are an important part of doing business. Some of the business transactions that involve contracts are buying materials and real estate, selling goods, leasing equipment, hiring consultants, and renting office space.<\/p>\n<section class=\"textbox keyTakeaway\">\n<h3>express vs. implied contract<\/h3>\n<ul>\n<li>An <strong>express contract<\/strong> is formed with specific written or spoken words.<\/li>\n<li>An <strong>implied contract<\/strong> is formed as a result of the actions of the parties that show agreement.<\/li>\n<\/ul>\n<\/section>\n<p>An example of an express contract is the written sales contract that you sign when you go to a car dealership to buy a car. An implied contract exists when you go to the supermarket to buy groceries. You and the supermarket have an implied contract that you will pay the displayed prices for the goods that you take from the shelves.<\/p>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm3890\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=3890&theme=lumen&iframe_resize_id=ohm3890&source=tnh&show_question_numbers\" width=\"100%\" height=\"300\"><\/iframe><\/section>\n","protected":false},"author":21,"menu_order":21,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"What Is a Contract?\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Contract\",\"author\":\"Steve Snodgrass\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/stevensnodgrass\/5480863464\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc-attribution\",\"description\":\"Understanding the Legal and Tax Environment\",\"author\":\"\",\"organization\":\"OpenStax\",\"url\":\"https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment\",\"project\":\"Introduction to Business\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2878,"module-header":"learn_it","content_attributions":[{"type":"original","description":"What Is a Contract?","author":"Nina Burokas","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc","description":"Contract","author":"Steve Snodgrass","organization":"","url":"https:\/\/www.flickr.com\/photos\/stevensnodgrass\/5480863464\/","project":"","license":"cc-by","license_terms":""},{"type":"cc-attribution","description":"Understanding the Legal and Tax Environment","author":"","organization":"OpenStax","url":"https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment","project":"Introduction to Business","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2902"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":11,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2902\/revisions"}],"predecessor-version":[{"id":9408,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2902\/revisions\/9408"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2878"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2902\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2902"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2902"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2902"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}