1. Unit 6 Contracts

2. Definition n An agreement between two or more parties enforceable in court.

3. Elements of a contract n Competent parties n Proper subject matter n Offer n Acceptance n Consideration (detriment)

4. Competent parties n Age n Sound mind n Exception for necessaries n Void versus voidable contracts

5. Proper subject matter n Not illegal n Not (excessively) immoral

6. Meeting of the minds n Offer must contain material terms –Newspaper ads - invitation to make an offer n Acceptance must be unqualified –Qualified acceptance is a counteroffer Terminates offer –Grudging acceptance

7. Consideration/Detriment n Exchange of value n Need not be money

8. Types of contracts n Express bilateral –Promise for a promise n Express unilateral –Promise for an act –Exception to advertising exception n Implied (Quasi-contract) –Implied in fact (real contracts where assent is implied) –Implied by law restitution to prevent unjust enrichment

9. Statute of frauds n Some contracts must be in writing to be enforceable n Current NC requirements n Exceptions –Partial performance –Promissory estoppel

10. Parol evidence rule n Written contract n Prior or contemporaneous oral statements barred –Except to clarify ambiguous terms n Subsequent oral statements admissible –Unless barred by an integration clause

11. Remedies n Money damages n Specific performance n Negative injunction n Rescission and restitution

12. Defenses n Impossibility n Impracticability n Mistake

13. Stipulated (liquidated) damages n No penalties n Reasonably related to actual damages

14. Time n Statute of limitations n Laches (equity)