AZK RE L-07 C-12 Contracts 1 - 1-51

  1. Elements of contract (5)
    • 1) Offer and Acceptance
    • 2) Consideration
    • 3) Consent
    • 4) Legal purpose
    • 5) Legally competent parties
  2. Contract must be (5)
    • 1) agreement or promise
    •      - Offer and Acceptance
    • 2) supported by lawful consideration
    •      - Consideration
    •      - by something of value that induces a party to enter into the contract
    • 3) voluntary
    •      - Consent
    •      - promise or set of promises
    • 4) for a legal act
    •      - Legal purpose
    •      - contract is invalid if it attempts to have an illegal objective
    • 5) made by competent parties
    •      - Legally competent parties
  3. 2 kinds of contract
    • 1) Express
    •      - in words
    •      - oral or written
    • 2) Implied Contract
    •      - act of conduct
  4. Express contract
    • - the parties
    •      - state the terms
    •      - show their intentions
    • - in words, either oral or written
    • - in order to be enforceable contract should be written
  5. Implied contracts
    - agreement of the parties is demonstrated by of their act of conduct
  6. Statute of Frauds
    - is a doctrine of law that requires certain contracts (RE sales or RE agreements) to be in writing
  7. A doctrine of law that requires certain contracts to be in writing
    Statute of Frauds
  8. Classification of contracts based on number of parties
    • 1) Bilateral Contract
    •      - both parties promise to do something
    • 2) Unilateral Contract
    •      - one sided agreement
  9. Bilateral Contract
    • - both parties promise to do something
    • - one promise is given in exchange of another

    • - RE contract is Bilateral Contract
    •      - seller promises
    •           - sell the parcel of RE
    •           - transfer title to the property to the buyer
    •      - buyer promises
    •           - to pay a certain sum of money or other lawful consideration of the property
  10. Unilateral Contract
    • - one sided agreement
    • - one party makes a promise in order to entice a second party to do something

    • - first party
    •      - is obligated to keep the promise    
    • - second party
    •      - is not legally obligated to act
  11. RE contract is Bilateral Contract b/c...
    • - seller promises
    •      - sell the parcel of RE
    •      - transfer title to the property to the buyer
    • - buyer promises
    •      - to pay a certain sum of money or other lawful consideration of the property
  12. Whether the agreement has been completed or not a contract can be... (2)
    • - Executory
    •      - one or both parties still have an act to perform
    • - Executed
    •      - all parties have fulfilled their promises
  13. Executory Contract
    - one or both parties still have an act to perform
  14. Sales Executory Contract
    • - from time it is signed until closing
    • - ownership has not changed hands
    • - seller has not received the sales price
  15. Executed Contract
    • - all parties have fulfilled their promises
    • - contract has been performed
  16. Sales Executed Contract
    • - at closing
    • - contract terms have been met
  17. Elements of contract (5)
    • 1) Offer and Acceptance
    • 2) Consideration
    • 3) Consent
    • 4) Legal purpose
    • 5) Legally competent parties
  18. offeror
    - person who makes the offer
  19. person who makes the offer
    offeror
  20. offeree
    - person to whom an offer is made
  21. person to whom an offer is made
    offeree
  22. mutual assent
    • - meeting of the minds
    • - complete agreement b/w the parties about the purpose and terms of the contract
  23. meeting of the minds
    • - mutual assent
    • - complete agreement b/w the parties about the purpose and terms of the contract
  24. Offer and Acceptance
    • - #1 Element of contract
    • - offered by the buyer
    • accepted by the seller
    • - agreement or promise

  25. Offer
    • - promise made by one party requesting something in exchange for that promise
    • - offeror will be bound to the terms if the offer is accepted
  26. Binder
    • - Letter of Intent
    • - offer presented in shorter document
  27. Letter of Intent
    • - Binder
    • - offer presented in shorter document
  28. Promise made by one party requesting something in exchange for that promise
    Offer
  29. Acceptance
    • - promise by the offeree to be bound by the exact terms proposed by the offeror
    • - must be communicated to the offeror
  30. Rejection of the original offer
    • - proposing any deviation from the terms of the offer
    • - creates Counteroffer
  31. Promise by the offeree to be bound by the exact terms proposed by the offeror
    Acceptance
  32. Proposing any deviation from the terms of the offer
    • - Rejection of the original offer
    • - creates Counteroffer
  33. Counteroffer
    - Changed offer
  34. Changed offer
    - counteroffer
  35. Offer can be terminated by...(3)
    • 1) by counteroffer
    • 2) if offeree fails to accept it before expiration of the offer
    • 3) by the offerees’ outright (direct) rejection of it
  36. Offer Revocation
    • (отмена)
    • - Offeror may revoke the offer at any time before acceptance
  37. Offer is revoked if...
    • offeree
    •     1) learns of the revocation
    •     2) observes the offeror acting in a manner that indicates that the offer no longer exists
  38. Consideration
    • - #2 Element of contract
    • - contract must be based on consideration
    • - is something of legal value offered by one party and accepted by another as an inducement to perform or to retain from performing some act
    • - is some interest or benefits to one party or some loss or responsibility by the other party
    • - could be
    •           - promise of love and affection
    •           - substantial sum of money
  39. Consent
    • - #3 Element of contract
    • - free and voluntary act of each party
    • - contract must be entered into by consent w/o undue influence
  40. Legal purpose
    • - #4 Element of contract
    • - contract must be for legal purpose
    • - must have a legal reason for existence
  41. Legally competent parties
    • - #5 Element of contract
    • - all parties to the contract must have a legal capacity
    •      - legal age (in most state 18)
    •      - have enough mental capacity
  42. Validity of a Contract. Contract can be (4)
    • 1) Valid Contract
    •      - meets all essential elements
    •      - enforceable
    • 2) Void Contract
    •      - lock one or more elements
    •      - not enforceable
    • 3) Voidable Contract
    •      - valid, but may be rescinded (анулирован) or disaffirmed (отменён)
    • 4) Unenforceable
    •      - can be valid, but neither party can sue the other
  43. Valid Contract
    • - has all legal elements
    •    1) Offer and Acceptance
    •    2) Consideration
    •    3) Consent
    •    4) Legal purpose
    •    5) Legally competent parties
    • .
    • - enforceable
    • - is binding in a court of law
  44. Void Contract
    • - lock one or more elements
    • - not enforceable (has no legal forth or effect)
  45. Voidable Contract
    • - has all legal elements on its face (valid)
    • - but may be rescinded or disaffirmed by one or both parties based on some legal principals
  46. Voidable Contract is considered by the courts to be a valid if...
    - the party who has the option to disaffirm the agreement does not do so w/i a period of time
  47. Example of voidable contract
    • - contract w minor
    • - entered by mentally ill person
    • - under duress or influence
    • - with misrepresentation or intend to defraud
  48. Enforceable Contract
    • - meets all elements of a valid contract
    • - must be written (Statute of Frauds)
  49. Unenforceable Contract
    • - neither party can sue the other to force performance
    • - “suit for performance” is impossible 
    • - oral agreement is unenforceable

    • - however
    •      - still can be “valid as b/w the parties” and fully executed
    • - suit for damage may be possible
  50. Can Unenforceable Contract be valid and fully executed?
    Yes, however neither party can sue the other to force performance
  51. What suit can be possible and impossible under Unenforceable Contract?
    • - “suit to force performance” is impossible 
    • - suit for damage may be possible
  52. Would oral agreement for the sale of parcel be Enforceable?
    YES
  53. Discharged Contract
    • - agreement is terminated by 2 reasons
    •      1) completely performed
    •      2) terminated b/c of a party’s breath or default
  54. “time is of the essence” Contract
    • - each of the elements of the contract must be performed w/i a specific time
    • - Reason for termination of the contract

    • - In practice
    •      - the parties should consult the attorney
  55. Each of the elements of the contract must be performed w/i a specific time.
    • “time is of the essence” Contract
    • Reason for termination of the contract
  56. Contract w/o deadline for performance
    • - should be performed w/i reasonable time
    • - court can declare a contract invalid b/c it did not contain a time or date for performance
Author
flashsmilenet
ID
342479
Card Set
AZK RE L-07 C-12 Contracts 1 - 1-51
Description
AZK RE L-07 C-12 Contracts 1 - 1-51
Updated