thomson/south-western©2008 chapter 7 contract law _______________________________________
TRANSCRIPT
Thomson/South-Western©2008
Legally Enforceable Agreement
• Expressed – declare intentions
• Implied - created by action
• Bilateral - promise exchanged for a promise• Unilateral - promise exchanged for performance
Thomson/South-Western©2008
Bilateral Contract Unilateral Contract
Promise for Promise Promise for Performance
Bilateral and Unilateral Contracts
Thomson/South-Western©2008
Legal Effect of Contracts
• Valid - 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.
Thomson/South-Western©2008
Contract Essentials
1. Competent parties
2. Mutual assent
3. Lawful objective
4. Consideration or cause
5. Written
Thomson/South-Western©2008
Problems
• Innocent misrepresentation
• Mistake
• Duress
• Parol Evidence rule
Thomson/South-Western©2008
STATUE OF FRAUDS
• Requires real estate contracts be written
• Electronic form acceptable - Esign
Thomson/South-Western©2008
Electronic Transactions
• Effective March 1, 2001
• Esign – electronic signature legal!
• Applies only to interstate commerce
• Texas passed UETA in 2001
• Look to the future for– Electronic closing– Recordings– Commercial contracts
Thomson/South-Western©2008
Performance
Most contracts are discharged by being fully performed or executed by the contracting parties in accordance with the contract terms.
Thomson/South-Western©2008
NOVATION
• A contract can also be performed by novation
• The substitution of a new contract between the same or new parties
Thomson/South-Western©2008
Breach of Contract
• Partial performance
• Unilateral Rescission
• Specific performance
• Money damages
• Liquidated damages
• Mutual Rescission
Thomson/South-Western©2008
Statute of limitations
• Written contracts have 4 years.
• Oral contracts have 2 years limit.
Thomson/South-Western©2008
Implied Obligations
• Contractual obligations by implication.
• No more “caveat emptor.”
Thomson/South-Western©2008
Performance
• Novation
• Breach of Contract
• Specific Performance
• Duress
• Fraud
• Mistake
• Misrepresentation