Principles - Chapter 7 Contracts Flashcards
Contract
agreement, written or oral, to do or obstain from doing certain things
Express Contract
declared intention, written or oral
Implied Contract
declaration by acts or conduct rather than words
Unilateral Contract
One sided - exchanges a promise for an act
need only be signed by party initiating the contract
Bilateral Contract
promises exchanged by both parties
signed by both
Legal effect of contract
void
voidable
valid
enforceable
Void Contract
Courts consider it to have no effect - no contract at all
ex: contract that is against the law
Voidable Contract
Still binding, but may be rejected by one or both parties
ex: contract induced by fraud
Valid Contract
binding and enforceable contract
Unenforceable Contract
is valid but is ont that cannot be proved or sued upon by the parties
ex: time expired contract
Elements of a Contract (CMLS)
- Capability (no minors, mental incompentence, convicts
- Mutual consent (offer & absolute acceptance)
- Lawful object (can’t be against the law)
- sufficient consideration - price paid
Discharge of contract
full performance partial performance impossibility of performance agreement between the parties release operation of law acceptance of a breach
Assignments
a party may withdraw without breaching a contract by assignment or novation
Novation
substitution b agreement of a new obligation for an existing one. requires consideration
Recission
cancellation of contract by mutual consent of parties or by legal action
Breach of Contract
when one party fails to perform
remedies included mutual acceptance, release, action to rescind, monetary, equitable action or action for restitution
Statue of Frauds
certain contracts need to be in writing to be valid and enforceable
purpose: prevent perjury, forgery, dishonesty
Statue of Limitations
maximum limits within which to bring legal action for a breach of contract Civil- 90 days Libel/Slander-1 year Contract/Title:-2 years Fraud/mistake-3 years Contract in writing-4 years Recovery of real property-5 years Court judgement-10 years
Laches
delay or negligence in asserting one’s legal rights (may lose the right even if w/i statue of limitations)
Option
a contract to keep an offer open or a right given for consideration to purchase or lease property upon specified terms, time w/o obligating the party who receives the right to exercise the contract
Lease Purchase Option
lessor grants lessee right to lease and then purchase at a future date. If agreed, all or part of payments may be applied to purchase price.
