CHP 32 - General Contract Law Flashcards
Contract
Agreement between 2+ parties to perform or refrain from performing some act
4 legal status’ of a contract
- Valid
- Valid but unenforceable
- Void
- Voidable
Valid
Meets legal requirements.
-Written ones are enforceable within a statutory period
-Oral : Generally enforceable with some exceptions
Valid but unenforceable
State law requires that some contracts are only enforceable if in writing.
There’s no legal recourse to enforce performance
Void
is not valid and therefore not a contract at all
Voidable
Initially appears to be valid but is subject to rescind due to disability
Voidable VS Void
A void contract does NOT require an act of disaffirmation to render it unenforceable
What makes a contract valid
- Competent Parties
- Mutual Consent
- Valuable Consideration
- Legal Purpose
- Voluntary Act of Good Faith
What makes a competent party
- Legal Age
- Mental Competency
- Legitimate authority
Mutual Consent AKA
Offer and acceptance/meeting of the minds
Statute of Limitations
Time restriction
Statue of Frauds
Contract must be in writing to be enforceable
Uniform Electronic Transactions Act
Makes it legal to use electronic signatures
Termination of Offer
- acceptance (becomes contract)
- Rejection
- Withdrawal
- Lapse of Time
- The offeree changes the offer
- Death or insanity
Define Parol
An oral contract
Express Contract
All terms have been stated and agreed
Implied Contract
Any Parties acts as if there is a contract
Bilateral Contract
Both parties promise to perform
Example: Earnest money
Buyer promises to pay, seller promises to deliver title
Unilateral Contract
Only one party promises
Example: An option
Executed Contract
Fully performed and fulfilled
Executory Contract
performance not yet completed
Unconscionable Contract
unduly favors the party with superior bargaining power
Adhesion Contract
Dictated by the party who has the greater bargaining advantage
Not unconscionable bc it doesn’t unfairly exploit but there’s no true meeting of minds
Aleatory Contract
Effects are triggered by occurrence of a chance event
Example: Insurance policies
Performance
Partial or sufficient
Infeasibility
Valid contract canceled bc it’s not possible to perform
Mutual agreement to terminate or renounce
Novation
Cooling Period Rescission
Cancellation without injury within statutory period of time
Revoke contract at anytime before the other party has performed its obligations
Revocation
Cancellation by one party without consent of the other
Abandonment
Party fails to perform contractual obligations
Operation of law
rights and liabilities of parties change due to law
Example: BK
Breach of contract
Failure to perform AKA Default
Legal remedies for default
Rescission
Forfeiture
suit for damages
Suit for specific performance
Types of compensation for damages
Liquidated and unliquidated damages
Liquidated
When compensation is known via contract
Unliquidated
Contract does not specify amount
Reformataion
Legal action filed when Contract has mechanical or clerical error that needs to be corrected
When does a counteroffer become a contract
When the offeree accepts without changing
When does an offer become a contract
When the offeree gives the offeror notice of the acceptance
If an offeree alters any part of an offer and then signs it ______
The original offer is extinguished and the offeror is not bound by any agreement
A buyer withdraws an offer before acceptance what is the status of the offer
The offer is extinguished along with the sellers right to accept it
A seller signs a listing agreement and then decides not to sale does the broker have any recourse
YES possibly
If the offer accepted is vague which necessary condition may be found missing
Mutual consent
