© OnCourse Learning Chapter 7 : Contract Law

© OnCourse Learning A legally enforceable agreement to do (or not to do) a particular thing.

-Legally Enforceable Agreement Expressed - declare Implied - created by action Bilateral - promise exchanged for a promise Unilateral - promise exchanged for performance © OnCourse Learning

Bilateral Contract Promise for Promise Unilateral Contract Promise for Performance © OnCourse Learning

Legal Effect of Contracts Valid - meets all requirements of law. Void - no legal effect & not a contract. Voidable - one party bound but not the other. Unenforceable – may have been valid at an earlier time but now enforcement is barred. © OnCourse Learning

Contract Essentials Competent parties Mutual assent Lawful objective Consideration Written © OnCourse Learning

MEETING OF THE MINDS Offer Acceptance Counteroffer Offer Acceptance

© OnCourse Learning COUNTEROFFER Any change in the terms. Upon receiving the offer, the offeree has three options: to agree to it, to reject it, or to make a counteroffer. An offer can be revoked by the offeror at any time prior to the offeror hearing of its acceptance

© OnCourse Learning DURESS Duress (use of force), menace (threat of violence), or undue influence (unfair advantage) cannot be used to obtain agreement.

 An act intended to deceive for the purpose of inducing another to part with something of value  Mutual agreement requires that there be no fraud, misrepresentation, or mistake in the contract if it is to be valid © OnCourse Learning FRAUD

In each state there is a law that is commonly known as a statute of frauds. Its purpose is to prevent frauds by requiring that all contracts for the sale of land, or an interest in land, be in writing and signed to be enforceable in a court of law. Statute of Frauds © OnCourse Learning

 Effect as of March 1, 2001  Authorizes electronic agreements  Allows for electronic signatures  State may supercede this legislation © OnCourse Learning ESIGN ACT

Performance Most contracts are discharged by being fully performed or executed by the contracting parties in accordance with the contract terms. © OnCourse Learning

NOVATION the substitution of a new contract between the same or new parties.

© OnCourse Learning DECEASED PARTY If one of the contracting parties dies, a contract is considered discharged if it calls for some specific act that only the deceased person could have performed.

Breach of Contract Partial performance Unilateral Rescission Money damages Specific performance Liquidated damages Mutual Rescission Statute of limitations © OnCourse Learning

Key Terms Breach of contract Competent party Consideration Contract Counteroffer Duress Fraud Liquidated damages Power of attorney Specific performance Void contract Voidable contract © OnCourse Learning