The contract is an agreement between two or more persons to establish, change or terminate civil rights and obligations. A contract is the most common type of transaction. The content of the contract includes the rights and obligations of the parties concluding the contract and the conditions under which the contract enters into force or loses it. The concept of the contract is used in three meanings, the contract as:
- Legal fact, the basis for the emergence, change, or termination of a civil legal relationship;
- Agreement of the parties, providing for the rights, obligations, and the procedure for their implementation;
- A document that contains a specific message and the content of the contract is its conditions, which are divided into essential, ordinary, and accidental (Hutchison & Myburgh, 2020).
Ordinary conditions – conditions provided for by law and come into effect automatically, regardless of their indication in the contract. Random conditions supplement or change the usual conditions. Such conditions are included in the text of the contract at the discretion of the parties, but their absence does not affect the validity of the contract. All contracts can be classified into several types, differing from each other according to some criteria (Hutchison & Myburgh, 2020). Unilateral – in one party, the contract gives rise to rights; in the other – obligations; and bilateral – at the conclusion of the contract, each party acquires both rights and obligations. In addition, there is a division into paid, implying the property representation of one party due to the counter-property representation of the other party (Stewart, Swain, and Fairweather, 2019). Also gratuitous – property representation is made by only one party (Hutchison & Myburgh, 2020). It is important to emphasize that the contract of donation, that is, a free gift, belongs to the second type. However, the promise is not a contract since the basic conditions are not met, allowing to assert the legal conclusion of the transaction.
Separately, it is worth considering an option contract as a separate aspect of making and concluding transactions. The fact is that an option agreement differs from other demand agreements in that the will of a person is a condition for both parties. The counter-obligation also depends on the actions of the party that has the right to demand. The counterparties have the right to establish in the document the deadline for execution or the circumstances on which the execution will depend. In what form it is indicated depends on the nature of the transaction and the needs of the parties (Berlee, Tai, and Mak, 2019). Within this period or upon request, the company must fulfill its part of the agreement: pay the counterparty the amount specified in the agreement; perform any transaction with movable or immovable property (Berlee, Tai, and Mak, 2019). If the term is not determined, in the event of a dispute, the court may conclude that the option agreement has not been concluded.
According to the US Code of Federal Law, fraud is the organization of a fraudulent scheme or ploy, the implementation of preparatory actions aimed at developing a fraudulent scheme or ploy for the purpose of committing fraud. It is important to note that one of the types of fraud in the legislation is the forgery or the conclusion of an incorrect contract, where there is an unacceptable and obviously known violation of the subject or object of the contract (Stewart, Swain, and Fairweather, 2019). This allows concluding that bad faith in the conclusion of the contract is punishable by law.
References
Berlee, A., Tai, E. T. T. & Mak, V. (Ed.). (2019). Research handbook in data science and law. Edward Elgar Publishing Limited.
Hutchison, A. & Myburgh, F. (Ed.). (2020). Research handbook on international commercial contracts. Edward Elgar Publishing Limited.
Stewart, A., Swain, W. & Fairweather, K. (2019). Contract law. Principles and context. Cambridge University Press.