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Chapter 7

________________ Contract Law

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-Legally Enforceable AgreementCONTRACT

Expressed - declareImplied - created by actionBilateral - promise exchanged for a

promiseUnilateral - promise exchanged for

performance

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Bilateral Contract

Promise for Promise

Unilateral Contract

Promise for Performance

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Legal Effect of ContractsValid - 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.

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Contract EssentialsCompetent parties Mutual assentLawful objectiveConsiderationWritten

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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

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Esign Act

Effect as of March 1, 2001 Authorizes electronic agreements Allows for electronic signatures State may supercede this legislation

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Meeting of the Minds

Offer

Acceptance Counteroffer

OfferAcceptance

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PerformanceMost contracts are discharged

by being fully performed or executed by the contracting parties in accordance with the contract terms.

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Breach of ContractPartial performanceRescissionMoney damagesSpecific performanceLiquidated damagesStatute of limitations

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Key Terms Breach of contract Competent party Consideration Contract Counteroffer Duress

Fraud Liquidated damages Power of attorney Specific performance Void contract Voidable contract