Option contracts are contracts in which the offeror, or promisor, is limited in their ability to withdraw or rescind a contract. An option contract is an important element of a unilateral contract. Traditionally a unilateral contract is only formed when the action under consideration is completed. This is an issue because it provides no protection to an offeree who has completed the partial performance of the contracted action before the offeror withdraws the contract under discussion. 

An option contract transforms a unilateral contract into a bilateral one because it provides some guarantee to any party providing agreement to the contract that their actions will receive compensation. The compensation may begin immediately after the action is begun or may only come into effect once a significant portion of the work is completed. The party which has engaged an action leading to the partial performance of the contract may be able to claim detrimental reliance upon the belief that the offeror would provide payment.

For instance, Mike hired Steve to paint the walls and ceiling of his room for $100. Mike told Steve to leave after Steve had finished painting the four walls and was in the middle of painting the ceiling.

Under a traditional unilateral contract, Steve would not be entitled to any of the $100 because the money was provided as consideration for the completion of the task. Steve, however, could compel Mike through promissory estoppel to compensate him for the partial performance of the task. Steve undertook the actions under a detrimental reliance that Mike would allow him to complete to task.

Option contracts are usually found in real estate. Real estate option contracts exist primarily for the benefit of the buyer. The buyer in a real estate option contract is allowed time to secure financing, to arrange for a contractor to examine the land, and to investigate relevant zoning laws governing the property.

Real estate option contracts do not oblige the buyer to grant agreement to the seller’s offer. Agreement in real estate contracts can be withheld by a buyer looking to make money off the land. Real estate option contracts often have a short period of time before the terms laid out in the contract lapse.

A non-compete agreement is a type of agreement contract created by employers, which prohibits employees from being employed by competitors or similar companies. Prior to working for a company, an individual may be required to sign a non-compete agreement. 

This agreement will usually outline how long the agreement lasts and to what geographical location the agreement applies. After an individual signs a non-compete agreement, he/she will not be permitted to work for competitors of the company.

There has been an extensive amount of debate surrounding non-compete agreements. For example, it prohibits an individual from seeking employment in a field that he/she has experience in, thereby significantly limiting his/her employment opportunities. These agreements are also very difficult to enforce. 

An employer would need to know where his/her past employees were seeking employment, and subsequently take the legal action necessary to prevent them from being employed in these locations.

Despite the many concerns regarding non-compete agreements and the flaws associated with this type of contract, there are practical reasons for using them. For example, some companies maintain confidential client lists to which employees have access. In addition to these customer lists, employees also have access to marketing strategies, new products, and additional confidential information. If a former employee chooses to acquire employment with a competitor, he/she may reveal this information, thereby adversely impacting a company.

A non-compete agreement is considered to be a legally binding contract, as long as the conditions outlined within the agreement are reasonable. 

In order to understand the difference between a contractor agreement and a subcontractor agreement, it is first important to understand the difference between a contractor and a subcontractor. In many instances, a business will hire a contractor to complete certain tasks or duties.

 

 

A contractor is not considered to be an employee. Instead, a contractor will act as an independent entity, performing certain tasks for the company. A contractor agreement is an agreement that exists between a company and a contractor that the company hires. This agreement will be documented in written form. 

 

 

The document will outline all pertinent features of the agreement, including the tasks that are to be completed by the contractor, the time period that the contractor has to complete these tasks, and the compensation that the contractor will receive for his/her work. 

 

 

In order to successfully complete the tasks outlined in a contractor agreement, a contractor may be required to hire a subcontractor. A subcontractor is an individual who is hired by a contractor to provide the contractor with goods or services necessary to complete the tasks specified in an existing agreement. A subcontractor will be hired by a contractor after the contractor has been hired by a company.

 

 

 

A subcontractor agreement usually exists between a contractor and a subcontractor. It outlines information similar to the conditions detailed in a contractor agreement. In most instances, the contractor will be responsible for compensating the subcontractor and the subcontractor is required to complete certain tasks for the contractor. Both a contractor and subcontractor work together to complete specified duties for a company or an individual. 

A Marital Settlement Agreement is a kind of contract which can be drawn up by the two primary parties to the legal action of a marital divorce, as provides for the settlement of the various rights, privileges, and responsibilities held by the two individuals without the necessity of further litigation or adjudication.

U.S. divorce laws are, for the most part, formulated and carried out on a state-by-state basis. Thus, the particular Marital Settlement Agreement drawn up in reference to a particular marriage should refer to the applicable laws of that specific jurisdiction and provide against the possibility of provisions which cannot legally go into effect in that particular state.

A Marital Settlement Agreement, as will generally be entered into with the assistance of legal counsel separately retained by both of the parties to the divorce, can most effectively proceed by providing for all of the potentially legally relevant aspects of the legal relationship between the two individuals.

A Marital Settlement Agreement does not itself provide for the legal effectiveness of the severing of the legal relationship between the two parties signatory to the contract in the form of a divorce, nor does it enact the initiation of the legal process of the court considering and potentially approving the rightness of such a legal motion. Often Marital Settlement contracts are drawn up as preambles to entering into an amicable divorce.

If there is a history of contractual relations between the two parties and the offeree does not comment on a proffered contract, their silent acceptance may be inferred from past history. However, a series of contracts must exist for this standard to be applied.

The terms of acceptance, such as requiring that acceptance be faxed or mailed to the offeror, may be laid out in the text of the offer. These are acceptable restrictions that can be placed on conditions of acceptance and are not considered to place an unreasonable burden upon the offeree. The acceptance must be returned in such a way that meets or surpasses the level laid out by the offerror.

If the acceptance is sent through the postal system, it is considered to be in effect as soon as the postage on it has been paid, whether it is delivered to the offeror or not. This is the case because the acceptor fulfilled a reasonable attempt to convey their acceptance. In addition, forcing the acceptor to ensure that the postal service completed delivery of the acceptance is seen as placing an unfair burden on the acceptor. The one exception to this “mailbox rule” is in contracts which specify that the contract is conditional on receipt of acceptance.

The acceptance must be made in a timely manner. If the offer does not give a deadline by which the contract must be accepted, the courts have decreed that the acceptance must still be in a reasonable amount of time. It is impossible for acceptance to be delayed forever.

Legal Context for Executive Agreements

 

 

Despite the name, an executive agreement is not meaningfully an aspect of contract law, at least according to the terms and conditions through which this legal category is usually understood, but rather of Constitutional law. More specifically, the “executive agreement” concept in U.S. law pertains to such varied matters as the ability to exercise control over the foreign policy of the country; more specifically in terms of its relationship to other nations through treaties and other documents and mechanisms and to the separation of powers between the different branches of the Federal U.S. Government.

 

 

This last concept constitutes a primary consideration undertaken by the U.S. Constitution, and accordingly applicable to the theories and debates as continue to this day, over the application of the United States’ foundational and essential, yet broad and ambiguous, document. 

 

 

Application of Executive Agreements in U.S. Law

 

 

To further illuminate these points, it might be noted that an executive agreement is a treaty passed by the President of the United States with the government of another national jurisdiction and without the consent of the legislature of the United States. Presidents are said to have used the so-called “discretion” vested in their office when they make the determination of enacting an executive agreement and thus bypassing the necessity of relying upon the power of Congress. Moreover, an executive agreement could applicably be contrasted with a legislative-executive agreement. 

An agreement is the second essential step in creating a contract. A formal contract is now recognized by the signing of a contract. In an informal contract, which is a contract when signatures are not exchanged, acceptance is demonstrated by the actions of the two parties. In a bilateral contract, agreement occurs when the two parties accept the obligations placed on them. When a unilateral contract is in effect, agreement occurs when the offeree completes the action requested by the offeror.

The “meeting of the minds” as a standard for recognizing agreement has fallen out of favor due to the recognition that a court cannot assume to know what is within the mind of any individual. As a result, the court cannot possibly interpret the intentions of any party to a contract at the time they enter into the contract.

There are three tests which the courts use to determine if an essential element of a contract is missing. The first standard that the courts have adopted is the “reasonable person test.” The reasonable person test is designed to guard against any agreement which would be detrimental to the person agreeing to the contract. 

When there are elements missing from a contract that is presented before the courts in dispute, the courts employs an “officious bystander test,” which states that terms can be added to a contract in the event that the terms would have been accepted by the parties if only they had been suggested during the negotiations. 

The “business efficacy rule” states that a rule can be implied in the event that it would be included by any reasonable businessman in an attempt to make their businesses run more efficiently. The business efficacy rule only allows the courts to add the simplest terms which would lead to increased efficacy.

A trade agreement is a type of agreement that exists between two or more countries in order to govern the trading procedures that exist between these states. Within the domain of international trade, there are a range of tariffs and prohibitions which limit trade between certain countries.

 

 

Trade agreements can function to counteract these barriers and promote trade between these countries. Limiting trade barriers is advantageous for the United States economy, as it allows for the exportation of more goods. It also helps to benefit participating countries, as the United States can import an increased quantity of goods from these countries, and subsequently sell these goods within the United States. The details of a free trade agreement will vary from one agreement to another. 

 

 

Currently, the United States is engaged in a free trade agreement with a number of different countries. For example, the U.S. has established a free trade agreement with Australia, Jordan, Panama, South Korea, and Singapore, just to name a few.

 

 

Perhaps the most widely known of the existing free trade agreements is the North American Free Trade Agreement (NAFTA). The North American Free Trade Agreement is an agreement that exists between the United States, Mexico, and Canada. The initial stages of the agreement occurred between the United States and Canada, and subsequently, Mexico entered into the contract. NAFTA limits the trade barriers that existed between these three countries and encourages open trade.