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  • JUST WHAT IS A CONTRACT ANYWAY?

    This week’s question:
    I have often wondered just what is a contact. I do not have any contractual problems right now, but I am really curious about the legal definition of a contract. Please address this issue in one of your future columns. Thanks.
    /s/Denise D.
    Almaden Valley

    Dear Denise:
    That sounds like a very simple question, Denise, but volumes have been written about that word. In law school, one of the important courses in the first year in this country is Contracts.
    The California Civil Code (herein “C.C.”) Section 1549 defines a contract as “an agreement to do or not to do a certain thing.”
    Almaden Times readers can go to their computers and enter any of the California Civil Code sections in their favorite search engine and that particular section will be up on their monitors in a heartbeat.
    It is essential to the existence of a contract that there should be: 1. Parties capable of contracting; 2. Their consent; 3. A lawful object; and, 4. A sufficient cause or consideration, according to C.C. Section 1550. (This section, by the way, was adopted by the State Legislature in 1872; yes, that’s 1872.)
    You may also wonder about just who is capable of entering into a contract. That question is answered in C.C. Section 1556 that provides “All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights”.
    Two people can enter into a contract for the benefit of a third person and the third person may enforce that contract at any time before the contracting parties rescind it, pursuant to C.C. Section 1559.
    According to Witkin, Summary of California Law, Tenth Edition, Contracts, p. 59, the word “contract” is often used with different meanings, e.g., as a synonym for “agreement” or “bargain.” It may refer to legally ineffective agreements, or wholly executed transactions; to acts of parties, to a document that evidences them, or to resulting legal relations; and a statute may give still other meanings.
    You will note in the third paragraph of this response above that “consideration” is essential to the existence of a contract. Consideration is covered in Chapter 5 of the California Civil Code, starting with Section 1605.
    It provides that any benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration for a promise.
    Of course, the consideration of a contract must be lawful, i.e., not contrary to an express provision of law, not contrary to the policy of express law, though not expressly prohibited, and not otherwise contrary to good morals, according to C.C. 1667.
    There are, of course, many different types of contracts. A contract is either express or implied. An express contract is one, the terms of which are stated in words. An implied contract is one, the existence and terms of which are manifested by conduct, according to C.C. Sections 1619 to 1621.
    Pursuant to C.C. Section 1622, all contracts may be oral, except such as are specially required by statute to be in writing.
    If the contract is required by law to be in writing, if it is prevented from being put into writing by the fraud of a party to the contract, any other party who is by such fraud led to believe that it is in writing, and acts upon such belief to his prejudice, may enforce it against the fraudulent party.
    One of the more recent additions to the California Civil Code concerning contracts is Title 2.5, entitled “Electronic Transactions”. It is known as the Uniform Electronic Transactions Act and it was passed into law in 1999.
    Said Act provides new or expanded definitions of such things as “Agreements”, “Automated transactions”, and “Computer programs.” Under Section 1633.2(e), “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
    Under that same law in 1633.2(f), “Electronic agent” means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review by an individual.
    So, you can see, Denise, that the definition of a “Contract” is very broad and has many implications and much involvement with other areas of the law, such as family law, property rights and obligations, criminal law, and much, much more. I wish we had more time and space to address those issues.
    Thank you for contacting us with that very good question.
    /s/Donald J. DeVries
    Almaden Valley Times

    You can reach Mr. DeVries with your questions by email at don@almadenvalleylawyers.com, with “Almaden Times” in the subject line, fax at (408)268-6502, telephone at (408)268-9500, or mail at DeVries Law Office at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your name will not be used. No attorney-client relationship is created by these articles.

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