2.  Valid ◦ Legally good  Void ◦ No legal force  Voidable ◦ Not void, but may be voided by one party  Unenforceable ◦ Some rule of law can not be enforced by the court.

3.  Express ◦ Stated in words ◦ Written or spoken  Implied ◦ Based on actions (not words)

4.  Bilateral ◦ Contains two promises  Unilateral ◦ Contains one promise

5.  Oral ◦ Spoken words  Written ◦ Write out exact terms

6. 4.02

7.  Complete ◦ All terms have been carried out properly and completely.  Time ◦ Court will honor time request, if it is deemed “of the essence.” ◦ If not mentioned in contract, then a reasonable time will be assumed.

8.  Satisfactory ◦ Law requires that services be completed in a satisfactory manner. ◦ Reasonable person test  Would a reasonable consider the work to done in satisfactory manner?  Substantial ◦ Slightly less than full performance  Must meet the following rules:  Acted in Good Faith  Completed Major Components of Contract  Only Minor Details Incomplete.

9.  Tender of Performance ◦ Tender – Offer to Perform ◦ Must make tender even if you know the other party will not perform their part of the contact.

10.  Mutual Release ◦ Each side releases the other side from the contract.  Accord and Satisfaction ◦ Substitute one contract for another.

11.  Death or Illness in a Personal Service Contract ◦ Only allowed in Personal service contracts. ◦ What is personal service?  Photographer  Artist ◦ Any other contract must be completed.

12.  Destruction of the Exact Subject Matter ◦ If the subject matter is essential to the contract then it will be discharged.  Illegality ◦ Any illegal contract is void.

13.  Wrongful Alteration ◦ Any altering or changing of a contract will discharge parties to the agreement.  Statute of Limitations ◦ Individual states have a time limit on lawsuits to be filed. ◦ What is the only crime/tort that doesn’t have a time limit? Murder

14.  Bankruptcy ◦ Debtors can be discharged from contracts after filing for bankruptcy.

16.  Legally transferring your RIGHTS in a contract. ◦ Assignor – party who transfers the right. ◦ Assignee – party to whom the right is transferred.  No consideration needed.  Must not change the obligations in the contract.  Must be a RIGHT not a DUTY.  Assignor is responsible for contract fulfillment.

17.  Transfer a duty.  Delegating party is still responsible for the contract being fulfilled.  Contracts that CANNOT be delegated: ◦ Promise to perform service personally. ◦ Exercise of personal skill or judgment. ◦ Contract prohibiting delegation.

18.  Replacing a party to a contract with a new one.  The other terms to the contract remain the same.

19.  Privity of Contract ◦ Determines who can sue who over a breach of contract.  Third-Party Beneficiary ◦ A person who is not a party to a contract but benefits from it. ◦ Has the right to sue over breach of contract.

20.  Wrongful failure to perform one or more promises in a contract.  Anticipatory Breach ◦ Notified that a party to the contract will not fulfill their part of the contract prior to the required time of fulfillment. ◦ Lawsuit may be filed early in this case. Exception to the rules: Refusal to pay money owed at a future date.

21.  Acceptance of Breach ◦ Accept the breach of contract and discharge the other party without asking for damages.  Why?  Must show damages in order to win monetary damages.  Not worth the party’s time to file lawsuit.

22.  Money Damages ◦ Actual – Damages DIRECTLY related to breach. ◦ Compensatory – Award only for injuries suffered nothing more. ◦ Consequential – Damages that DO NOT flow directly from breach. ◦ Incidental – Reasonable expenses that INDIRECTLY from breach of contract. ◦ Liquidated – Anticipated damages agreed prior to contract being signed. ◦ Nominal – Award to proved legal injury but no actual damages caused. ◦ Punitive – Damages in excess of losses suffered in order to punish party for breach. ◦ Speculative – Damages awarded not on fact but on expectations from contract fulfillment.

23.  Specific Damages ◦ Ask court to order the other party to do what they agreed to do. ◦ Subject matter must be unique in nature. ◦ Which of the following is unique?  Real Estate  Stocks of General Electric  ’65 Ford Mustang with 44,000 miles  A brand new Ford F-150  Dozen Eggs Answers: Real Estate and Mustang are unique.

24.  Court order that prevents a party from performing an act.  Temporary or Permanent.  Violators are in contempt of court.

25.  Injured party must try to reduce the damages by all means possible (mitigation of damages).  What could you do to mitigate damages if a tenant breaks the lease and moves out early? Possible answers: Advertise for rent sign in yard, put sign up at local university, and place an advertisement in the local newspaper.