CONTRACTS Flashcards
Define contract
An agreement between 2 or more competent parties based on legal consideration that creates duties and obligations that are legally enforceable.
A voluntary agreement between legally competent parties to do or refrain from doing some illegal act
4 Elements required of every contract:
CLOC
C. Competent Parties
L. Legal object
O. Offer and acceptance (agreement between parties)
C. Consideration
When a contract has the above, it is enforceable and will hold up in court.
ENFORCEABILITY
An enforceable contract can be classified as being VALID. Or VOIDABLE.
A VALID CONTRACT
A valid contract contains all the essential elements and is binding and enforceable upon both parties to the contract
A VOIDABLE CONTRACT has all the elements to create the contract and is enforceable but is subject to rescission by one of the parties to the contract.
Contracts are generally VOIDABLE when one of the parties is being victimized because he:
Was a minor
Was misled
Did not agree to the contract voluntarily
Is later found to have lacked competency at the time of entering into the contract.
Such a person could have the contract voided. If the injured party does not take any action, the contract is considered valid and enforceable.
A VOID CONTRACT
Does not have the 4 essential elements:
Competent parties
Legal purpose
Offer and Acceptance
Consideration
UNENFORCEABLE
A contract that is not void may be unenforceable.
Such a contract was valid at the time it was created but, for some reason, cannot be proved or enforced in court because:
It was written and all copies were destroyed or missing.
It was implied or oral, and there is no witness or no proof to the agreement.
A person failed to take action to enforce it within the period of time set by state’s STATUTE OF LIMITATIONS
Due to the principle of laches. The principle allows a court to declare a contract unenforceable due to neglect or undue delay in bringing about a legal claim or asserting a right even though the statute of limitations has not expired.
An express contract. Is a contract created by either written or oral argumen.
An implied contract is a contract that results from neither a written nor oral agreement but from the actions of the parties involved.
An executor contract that is to be performed..something remains to be done by one or both parties.
A contract is described as being executed when both parties to the contract have fully performed the terms..
Contracts for services are not transferable.
Contracts for Property and money are transferable.
Novation relieves an assignor of secondary liability.
The conclusion of a contract brought about by termination or discharge via fulfillment or full, partial or substantial performance.
A contract may discharged any time by agreement of the parties to recission, release or cancellation of the contract.
Failure of a party to perform creates a breach of contract.
In the case of a breached contract, the injured party may make use of legal remedies.
Rescission of the contract so he is restored to his original conditions.
Seek damages or compensation for the loss( liquidated damages or compensatory damages). Or
Take action for specific performance which is a court action to enforce the terms of the contract and force the defaulting party to perform the contract.
