Types of Contracts Flashcards
Two types of contracts:
express or implied
express
written or stated
implied
actions or evidence
Contracts can be:
unilateral/bilateral
unilateral - binds only one party….If then contract
bilateral - binds both parties - exchange of promises
Example of unilateral contract
Option
Option Contract
Option to purchase within a definite time period at a definite price
Option exercised-
contract becomes bilateral
Bilateral contract
exchange of promises, which bind both parties
Required elements of a contract:
Competent Parties - sane, sober consenting adults
Offer Acceptance - mutual agreement or consent w/o qualifications
Legal Purpose - legality of object
In writing - Statute of Frauds
Consideration - something of value (payment or promise) in exchange for what is being offered
Is a contract valid w/o being in writing
Yes, but not enforceable
Executed vs executory
Executed/fully executed - all terms/conditions have been met & carried out.
Executory
contract signed but not carried out
Valid/void
Valid -meet the requirements without in writing
Void/invalid - no binding effect on the parties who made it - (documented insane)
Voidable/unenforceable
one party has the right to withdraw (a minor, someone who signed under duress, or under the influence of alcohol or drugs, and injured party)
unenforceable
absent of statue of frauds
Termination, rescission, & breach of contract -
contract can be terminated for any of several reasons, including bankruptcy or foreclosure
mutual rescission
parties agree to cancellation, the contract is terminated
default
non-performance of a duty under a contract