© 2008 by South-Western, Cengage Learning Chapter 8 Charles J. Jacobs Thomas E. Gillett

© 2008 by South-Western, Cengage Learning Georgia Real Estate An Introduction to the Profession Seventh Edition Chapter 8 Contract Law

© 2008 by South-Western, Cengage Learning Expressed – oral or verbal declaration Implied - created by action

© 2008 by South-Western, Cengage Learning Bilateral and Unilateral Contracts

© 2008 by South-Western, Cengage Learning Essential Elements Legally Competent Parties Mutual Agreement Lawful Objective Consideration

© 2008 by South-Western, Cengage Learning Legal Effect of Contracts Legal Effect of Contracts Valid – all essential elements present Void – missing at least one essential element no legal effect & not a contract Voidable – one or more elements may be removed by the injured party Invalid – once was valid but validity has ceased

© 2008 by South-Western, Cengage Learning Legal Effect of Contracts Court would allow and uphold Court would not allow and uphold

© 2008 by South-Western, Cengage Learning Essential Elements Legally Competent Parties Minors Intoxicated Persons Power of Attorney Attorney-in-fact Corporations

© 2008 by South-Western, Cengage Learning Essential Elements Mutual Agreement - Meeting of the minds Offer, Acceptance & Communication Counteroffer

© 2008 by South-Western, Cengage Learning Meeting of the Minds Meeting of the Minds

© 2008 by South-Western, Cengage Learning Meeting of the Minds Meeting of the Minds

© 2008 by South-Western, Cengage Learning Meeting of the Minds Meeting of the Minds

© 2008 by South-Western, Cengage Learning Essential Elements Mutual Agreement Fraud Innocent Misrepresentation Mistake Contractual Intent Duress, Menace, Undue Influence

© 2008 by South-Western, Cengage Learning Essential Elements Lawful Objective Consideration – Something of value Exchange of Promises “For ten dollars and other good and valuable consideration” Earnest Money is not consideration

© 2008 by South-Western, Cengage Learning Essential Elements Contract in Writing Statue of Frauds Parole Evidence Rule Executory, Executed, Execute

© 2008 by South-Western, Cengage LearningPerformance Most contracts are discharged by being fully performed Novation – Substitution of new contract or new parties Deceased Party Property Damage

© 2008 by South-Western, Cengage Learning Breach of Contract Breach of Contract Partial performance Unilateral rescission Lawsuit for damages Lawsuit for specific performance Liquidated damages Mutual Rescission Statute of Limitations

© 2008 by South-Western, Cengage Learning Key Terms Key Terms Breach of contract Competent party Consideration Contract Counteroffer Duress Fraud Liquidated damages Power of attorney Specific performance Void contract Voidable contract