When a rainstorm erupts outside Rita’s Souvenir & Gift Shop, Rita and Shaw enter into an oral contract to split the revenue from Shaw’s sale of umbrellas to Rita’s customers. The terms of this contract are defined by .

An oral contract is defined by the words of the two parties.

Explanation:

Both Rita and Shaw have agreed upon a legal contract because they goal of the contract is legal (selling umbrellas and splitting the profits is a perfectly legal activity), and they have come into a voluntary agreement, no party has been forced upon agreeing anything.

Because the contract is both legal and involves mutual agreement, it is legal and eforceable.

The correct answer is letter "A": the words of the parties.

Explanation:

Depending on the context, oral contracts can be as valid as written contracts. In some other cases, they are valid only if there is written evidence. Either the case, terms must be set in which the parties involved in the contract agree on a given matter. In such cases, the terms of the contract will be subject to the words of the parties -just like un Rita and Shaw's case.

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