Principles 7 Flashcards
Contract
Is a written or an oral agreement (promise) made by one person to another to do something or to refrain from doing something.
Party
A person who takes part in a contract
Contractual obligation
The promise each party makes
Tender
An offer to perform a contract obligation
Executory Contract
When some future contract obligation is yet to be performed.
Executed contract
When all of the contract obligations have been performed, the transaction is completed.
Express contract
Is a contract of words established by an oral or a written agreement in which the parties declare their intention to make a contract.
Implied contract
Is established by the conduct of the parties, without a specific oral or written agreement.
Bilateral Contract
Both parties make a promise to do something or to refrain from doing something and both are obligated to perform.
Unilateral Contract
Only one party promises, and only that party is obligated to perform.
Valid contract requires these
- Parties must have the legal capacity to enter into a contract
- There must be an offer by one party and an acceptance of the other party
- There must be a lawful object to the contract
- Must be some form of consideration, or payment, supporting the contract.
- The Contract may have to be written
Void contract
- is one that has no legal effect from its inception
- agreement to do something illegal is VOID
Voidable Contract
- May be disavowed by one or both parties, depending on the circumstances
- ex: a voidable Contract is one that someone signs while intoxicated.
Unenforceable Contract
-is one signed under duress, such as the threat of physical or economic harm.
Legal capacity
They must have the legal ability( an adult, emancipated minor, and mentally competent) to make a contract.
Emancipated minor
- Can contract as an adult
- A minor becomes emancipated by marrying, joining the armed forces, or petitioning the court, which may approve the petition.
Constructive Fraud
Is a misrepresentation made without fraudulent intent, that is, deliberate intent to deceive.
Negligent misrepresentation
-is not made with criminal intent to deceive. It is the result of carelessness.
Consideration
Can be a promise to do something (or refrain from doing something) in the future.
Discharged Contract
A contract that is terminated
Rescission
A process where both parties agree to take back the contract
Reformation
- a matter of redrafting the contract or amending the escrow instructions.
Breach of contract
-occurs when one of the parties fails to perform all or part of the obligations required by the contract.
Statute of limitations
Law that stipulates the specific time period during which a legal action must be brought following the act that gives rise to it.
Option
The right to buy property at some time in the future at an agreed-on price
