Bilateral contract Arises when a promise is given inexchange for a promise in return (e.g., Xpromises to deliver a car to Y, and Ypromises to pay X an agreed price)

ConstructionConstruction, alteration, or repair (includingdredging, excavating, and painting) of buildings,structures, or other real property. Does not includethe manufacture, production, furnishing,construction, alteration, repair, processing, orassembling of vessels, aircraft, or other kinds ofpersonal property

Contract An agreement between two or moreparties to perform or to refrain fromsome act now or in the future. A legallyenforceable agreement.

Contract interpretation Key is to give effect to the intent of theparties as expressed in their agreement

Contract under seal Formalized writing with a special sealattached

1.2 1 of 7

Employment contracts

Employment of individuals by the federalgovernment is accomplished pursuant to civilservice laws. However, services may be acquiredunder a procurement contract, either from anindividaul or an organization, as long as anemployer-employee relationship is not establishedbetween the government and the personperforming the services.

Executed contract Has been signed by both parties; can alsobe a contract that has been completely

performed by both (or all) parties.

Executory contract Contract that has not yet been fullyperformed by one or more parties

Express contract Contract in which the terms of theagreement are fully and explicitly stated

orally or in writing

Formal contractRequires a special form or method offormation (creation) in order to beenforceable: 1) contract under seal; 2)recognizance; 3) negotiable instrument;or 4) letter of credit

1.2 2 of 7

Grants and cooperative agreements

These are used when the federal government intends toprovide assistance or support to private organizations orto state and local governments. Grants withoutcontractual obligations on the part of the recipient maybe characterized as a gift. Most grants require therecipient to use the funds or property only for specifiedpurposes. Such grants are contractual agreements but arenot procurement contracts

Implied-in-fact contract

Formed in whole or in part by the conduct (as opposed tothe words) of the parties. In order to establish:1) seller must have furnished some service or property tobuyer2) seller must have known that a reasonable person in theseller's shoes would have expected to be paid for theservice or property rendered by the seller3) buyer must have had the opportunity to reject theservices or property and failed to do so

Informal contract Contract that does not require a specifiedform or method of formation in order to

be valid

Intent

Generally to be ascertained objectively, by lookingat:1) words used by the parties in the agreement2) actions of the parties pursuant to the agreement3) circumstances surrounding the agreement- as they would be interpreted by the parties'subjective intentions (usually expressed after thefact).

Letter of credit An agreement to pay that is contingentupon the receipt of documents (e.g.,invoices and bills of lading) evidencingreceipt of and title to goods shipped

1.2 3 of 7

Negotiable instrument Check, note, draft, or certificate ofdeposit - each of which requires certain

formalties

Plain meaning ruleWhen a contract is clear and unequivocal,a court will enforce it according to its plainterms, set forth on the face of theinstrument, and there is no need for thecourt either to consider extrinsic evidenceor to interpret the language of the contract

ProcurementAlso known as "acquisition" involves contractingfor goods and services. Major categories include:(1) supplies; (2) construction; (3) service contract;(4) research and development; (5) rental of realproperty; (6) other contractual arrangements

Purchase of real propertyNot covered by procurement statutes. Per41 U.S.C. Sec.14, "[n]o land shall bepurchased on account of the UnitedStates, except under a law authorizingsuch purchase."

Quasi or implied-in-law contractA fictional contract imposed on parties bya court in the interests of fairness andjustice, typically to prevent the unjustenrichmnet of one party at the expense ofthe other.

1.2 4 of 7

RecognizanceAn acknowledgement in court by aperson that he or she will perform somespecified obligation or pay a certain sumif he or she fails to perform (e.g.,personal recognizance bond)

Rental of real propertyGeneral authority for leasing real propertyfor the federal government is vested in theGeneral Services Administration (GSA).GSA has delegated authority for leasingcertain types of property and location toother agencies

Research and development

The primary purpose of contracted R&D programs is to advancescientific and technical knowledge to the extent necessary toachieve agency and national goals. Directed toward objectives forwhich the work or methods cannot be precisely described inadvance. Difficult to judge the probabilities of success or requiredeffort for technical approaches. Contracting process is used toencourage the best sources from the scientific and industrialcommunity to become involved in the program and must provide anenvironment in which the work can be pursued with reasonableflexibility and minimum administrative burden.

Rules of interpretation

When a contract contains ambiguous or unclear terms, a court will resort to one or more of the followingrules in order to determine and give effect to the parties' intent:1) terms given a reasonable, lawful, and effective meaning2) contract will be interpreted as a whole and its various provisions will be "harmonized" to yield consistentexpression of intent3) negotiated terms given greater consideration than standard-form or boilerplate4) non-technical term will be given its ordinary, commonly accepted meaning, unless the parties clearlyintended something else5) specific terms prevail over general terms6) handwritten terms prevail over typewritten terms, which prevail over printed terms7) when language has more than one meaning, any ambiguity is construed against the drafting party8) an ambiguous contract should be interpreted in light of pertinent usages of trade in the locale and/orindustry, course of prior dealing between the parties, parties' course of prior performance of the contract9) express terms given preference over course of prior performance, which is given preference over course ofdealing, given preference over usage of trade10) words given preference over numbers or symbols

Sale of propertyArticle IV, Section 3, Clause 2 of the U.S.Constitution gives Congress the exclusive authorityto dispose of federal governmennt property.Authority is granted to the GSA administrator,who may delegate this authority to other agencies.

1.2 5 of 7

Service contract

Directly engages the time and efforts of a contractor whose primary purposeis to perform an identifiable task rather than to furnish an end item of supply.A service contract may be either a personal or nonpersonal contract. It canalso cover services performed by either professional or nonprofessionalpersonnel whether on an individual or organizational basis. Includes:maintenance, overhaul, repair, servicing, rehabilitiation, salvage,modernization or modification of supplies, systems, or equipment; routinerecurring maintenance of real property; housekeeping and base services;advisory and assistance services; operation of government-owned euqipment,facilities, and systems; communications services; architect-engineering;transportation and related services; and research and development

Supplies

All properties except land or interest in land.Include (but is not limited to) public works,buildings, and facilities; ships, floating equipment,and vessels of every type, character, anddescription, together with parts and accessories;aircrafts and aircraft parts, accessories, andequipment; machine tools; and the alteration orinstallation of any of the foregoing.

TransactionsMajor categories using contractual agreements are:1) Procurement of goods and services2) Purchase of real property3) Sale of real or personal property4) Grants, cooperative agreements, cooperative researchand development agreements and "other agreements"5) Employment of personnel

Unenforcable contractAn otherwise valid contract renderedunenforceable by some statute or law(e.g., an oral contract that, due to thepassage of time, must be in writing to beenforceable

Unilateral contract Arises when an offer can be accepted onlyby the offeree's perofmrance (e.g., X

offers Y $15 to mow X's yard

1.2 6 of 7

Valid contract Contract satisfying all of the requisitiesdiscussed - agreement, consideration,capacity, legal purpose, assent, and form

Void contract Contract having no legal force or bindingeffect (e.g., a contract entered into for an

illegal purpose)

Voidable contractAn otherwise valid contract that may belegally avoided, cancelled, or annulled atthe option of one of the parties (e.g., acontract entered into under the duress orunder false pretenses)

1.2 7 of 7