Contracts: Classification Flashcards
What are the classifications of a contract?
- Elements
- Validity of contracts
- Enforceability of contracts
- Offer and acceptance
What are the elements of a contract?
i. Mutual agreement (both parties have to agree to the terms)
ii. Competency (both parties must have contractual competency, the ability to agree to the terms at the time of the contract formation)
iii. Consideration (the contract regards something of value for both parties)
iv. Lawful purpose (if it is not legal you cannot have a valid contract regarding it)
v. Formal requirements (proof, oral or written. Oral is ok, but must have a witness by clergy)
What are the classifications of the validity of a contract?
- Valid
- Void
- Voidable
What is a valid contract?
A contract that is enforceable by the courts
-Contract is made and all elements are satisfied.
-If one part does not perform - breach of contract. (Resolutions = damages.
Ex. purchasing a car for $500 more than the one you were going to buy. You get the money back plus the extra $500 you had to front)
What is a void contract?
Not enforceable because no legal contract was ever made
What is a voidable contract?
The contract can be set aside by one party.
-Minor: the minor has the ability to set aside the contract at any point. Not legal but also not enforceable
-Fraud: Ex. car purchased online based on advertisement but when the car is picked up it dies not have the credentials stated in the contract. Resolution, you get your money back?
What does the Statute of Frauds require to be in writing in order to be enforeable?
Sale of real property
-Land and anything firmly attached to it
-Opposite of personal property which is all things that are not real
-From the english law where real property = wealth
What is the difference between an express and implied contract?
- Express contract - the terms are clearly stated and can be oral or written
- Implied contract - terms are implied
-Quasi contract: a court created contract to prevent the unjust enrichment of one party
What does a formal contract require?
A special form
1. Promissory note: commercial paper, negotiable instrument
-A promise to pay
-“Non-negotiable” cannot be “negotiated” or turned into money
2. Deeds: and all things necessary to show ownership of real property
3. Mortgage: proved that the bank has a secured interest in the real property. That is the loan is not satisfied the bank can repossess the property.
4. Lien: similar to a mortgage, but on personal property
What does a simple contract require?
Literally anything else a formal does not require
What is an executed contract?
Performance had been completed
What is an executory contract?
Performance is still due
-The contract is formed when it is stated and not executed until the performance is completed
Ex: funeral service
-Burial: executed when the person is interred
-Cremation: when remains are returned, when remains are interred, when remains are scattered
What is a unilateral contract?
A single promise
-Payment for service
-A promise for performance/ goods
-More difficult to prove in court
What is a bilateral contract?
A promise for a promise
-A contract is created when an offer is made
-Not executed until a later time
Who make the offer in a contract and who is it presented to?
Offeror makes the offer and Offeree is who it is being presented to
