1. Contracts Lesson Three

2. Learning Objectives  Understand the performance of contracts as related to time limits.  Know about assignment of a contract.  Understand novation and the liability.  Explain breach of contract and options.  Review how contracts may be terminated.  Understand the contractual process of Executory and Executed.

3. Time is of the Essence

4. Assignment  Most Contracts can be Assigned

5. Novation Example: The lender in an assumption substitutes the new buyer for the previous borrower.

6. Breach of Contract  Accept Partial Performance  Mutually Rescind the Contract  File Suit for Monetary Loss  Accept Liquidated Damages  File Suit for Specific Performance

7. Termination of Contracts  Death of the Party  Destruction of the Property  Judged Incompetent  Bankruptcy  Mutual Agreement

8.  Expiration of Time  Completion of Objective  Renounces  Misrepresentation of Facts

9. The Contract Process  “Irrevocable and Binding”  Executory Contract  Executed (Legal Title)

10. Executory Becomes When Sold (offer & acceptance) Equitable Title Executed At Act of Sale (Legal Title transfers)