© 2010 by Cengage Learning Chapter 7 ________________ Contract Law

© 2010 by Cengage Learning -Legally Enforceable Agreement Expressed - declare Implied - created by action Bilateral - promise exchanged for a promise Unilateral - promise exchanged for performance

© 2010 by Cengage Learning Bilateral Contract Promise for Promise Unilateral Contract Promise for Performance

© 2010 by Cengage 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.

© 2010 by Cengage Learning Contract Essentials Competent parties Mutual assent Lawful objective Consideration Written

© 2010 by Cengage Learning 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

© 2010 by Cengage Learning  Effect as of March 1, 2001  Authorizes electronic agreements  Allows for electronic signatures  State may supercede this legislation

© 2010 by Cengage Learning Offer Acceptance Counteroffer Offer Acceptance

© 2010 by Cengage Learning Performance Most contracts are discharged by being fully performed or executed by the contracting parties in accordance with the contract terms.

© 2010 by Cengage Learning Breach of Contract Partial performance Rescission Money damages Specific performance Liquidated damages Statute of limitations

© 2010 by Cengage Learning Key Terms Breach of contract Competent party Consideration Contract Counteroffer Duress Fraud Liquidated damages Power of attorney Specific performance Void contract Voidable contract