In
contract law
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...
, a simple contract, also known as an informal contract, is a contract made
orally, in writing, or both, rather than a contract made under
seal. Simple contracts require
consideration
Consideration is a concept of English law, English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. It is commonly referred to a ...
to be valid, but simple contracts may be implied from the conduct of
parties bound by the contract.
In his ''
Commentaries on the Laws of England'' William Blackstone observed that in the seventeenth century,
debtor
A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this ...
s used simple contracts as one of three accepted forms of unsecured
debt
Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...
instruments. In 1828, the
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body of the United Kingdom, and may also legislate for the Crown Dependencies and the British Overseas Territories. It meets at the Palace ...
amended the statute of frauds so that oral acknowledgments or promises could not be used as evidence to prove the existence of a simple contract. Today, some American jurisdictions have established that a security interest is perfected "when a creditor on a simple contract cannot acquire a judicial
lien
A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...
that is superior to the interest" of the secured party.
[Timothy R. Zinnecker]
''Purchase Money Security Interests in the Preference Zone: Questions Answered and Questions Raised by the 1994 Amendments to Bankruptcy Code § 547''
62 47, 84 (1997) (internal quotations omitted).
See also
* ''
New England Mutual Life Insurance Co. v. Woodworth''
*
Company seal
A company seal (sometimes referred to as the corporate seal or common seal) is an official seal used by a company. Company seals were predominantly used by companies in common law jurisdictions, although in modern times, most countries have done ...
References
Common law
Contract law
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