Money & Career

Understanding Basic Contracts

Spot when a binding deal has formed, read the terms that matter, and know what happens when someone breaks one.

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What you will learn about Understanding Basic Contracts

The 7-day sprint
  1. What Makes an Agreement a Contract. A contract is an agreement that creates mutual obligations the law will enforce, and it needs mutual assent, consideration, capacity, and legality.
  2. Mutual Assent, Offer, and Acceptance. Courts test agreement objectively, by what each side outwardly expressed, not by what either side privately intended.
  3. Consideration, the Price of Enforceability. A promise is enforceable only if something was bargained for and exchanged to induce it, so pure gifts do not create contracts.
  4. Capacity, Legality, and Broken Consent. Even a well-formed bargain fails if a party lacked capacity, the purpose was illegal, or consent was obtained by fraud, duress, or a shared mistake.
  5. When the Deal Must Be in Writing. Most contracts are valid without a writing, but a defined set of categories falls under a state Statute of Frauds and needs a signed writing to be enforceable.
  6. Which Law Governs and What the Terms Do. Sales of goods run on Uniform Commercial Code Article 2 while services, land, and employment run on state common law, and the parties' own written terms displace many default rules.
  7. Breach, Remedies, and a Working Checklist. The usual remedy for breach is money that puts the injured party where performance would have left them, with specific performance reserved for rare cases.
The 80/20: the 7 concepts that matter most
  • The Four Elements: Mutual Assent, Consideration, Capacity, Legality
  • The Objective Theory of Assent
  • Consideration as a Bargained-For Exchange
  • Which Body of Law Governs: Goods Versus Everything Else
  • The Statute of Frauds and the MY LEGS Categories
  • Written Terms Are Private Law
  • Breach and Remedies, With Reliance as the Backup
The core idea, explained like you are 5

A contract is a swap of promises that the law will back up, and the law judges the swap by what each side outwardly showed, not by what either side was secretly thinking.

Then the quiz and the ladder

10 questions that correct you when you are wrong, and beginner, intermediate, advanced levels, each with a practical exercise.

Created Sep 13, 2026. No mistakes have been reported by learners.

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