Contracting Flashcards
Statute of fraud requires
Certain types of contracts must be in writing to be legally enforcible
Requirements for a valid contract (5)
Offer and acceptance Consideration Legally competent parties Legal purpose Made voluntarily
Severability in regard to contracts
The concept that if a court deems a term in the contract to be unenforceable, the remainder of the contract remains enforceable.
Voidable Contract
Appears valid, but one or both parties have a legal right to disaffirm it. This could be because
one of the parties lacks legal competence, or because there was a mistake or misrepresentation, causing a failure of reality in consent. The contract is voidable by the incompetent or misled party but enforceable against the other party.
Void Contract
A void contract isn’t a contract at all because it lacks one or more of the requirements for a valid contract. It has no legal force or effect; it’s unenforceable
time is of the essence
All parties must comply with contract terms in a timely manner; means that both parties faithfully agree to perform responsibilities within the time limits of
the contract.
executed contract
An executed contract is one in which all parties to a contract have met all contract term. A contract for the sale of real estate is executed by the delivery and acceptance of the deed and the payment of the purchase price. (Note that you may also see the
term “executed” used to refer a document that’s been signed.)
Executory contract
Contracts are executory until all of the promises in the contract have been completed. A contract for the sale of real estate is executory until the deed is delivered and accepted.
notices clause
Contract clause that describes how contract-related notice may be made and when notice is
considered to have been received.
unilateral rescission of a contract
When a breach occurs, the innocent party may unilaterally terminate the contract.
Partial performance
When one party meets some, but not all, of the terms of the contract. The innocent party may agree to accept partial performance, perhaps in return for some sort of compensation.
specific performance
specific performance suit seeks to force a party to make good on the promises made in some way.
Contract discharge
Aka performance, execution): all the parties have met all contract terms and are discharged from their contractual obligations
Contract rescission
(cancellation) generally results from an operation of law, such as breach of contract, destruction of the
object of the contract,
Novation
when one contract is substituted for another.
bilateral contract v unilateral contract
Bilateral contract–both parties have obligations.
Unilateral contract–only one party makes a promise, such as an option contract.
Choice of law clause
Specifies that any dispute arising under the contract shall be determined in accordance with the law in a particular jurisdiction.
Indemnification clause
Means one or both parties commit to compensate the other for any harm, liability, or loss arising out of the contract.
Arbitration clause
An arbitration clause requires the parties to resolve or attempt to resolve their disputes through an arbitration process.
Mediation Clause
A mediation clause requires the parties to attempt mediation prior to engaging in arbitration or a legal action
The difference between an addendum and an amendment to a contract
An addendum adds terms not address in main contact, such as adding repairs post inspection.
An amendment changes terms: closing date change; change in conveyances, price change.
