Section 10: Unit 1: Introduction to Contracts and Michigan Contract Law

Insertions to pre-printed forms have a specific order of precedence when it comes to interpretation. Let's see you put these in the right pecking order. ______1______ insertions take priority over both ______2______ material. _____3_____ insertions take priority over _____4_____ material. - typed and pre-printed - handwritten - pre-printed - typed

1 - handwritten 2 - typed and pre-printed 3 - typed 4 - pre-printed

Review the statement about the statute of frauds requirements for a real estate contract, and determine if it's a requirement under the statute of frauds. The contracting parties must be identified. - Is a requirement - Is not a requirement

Is a requirement

Determine if the example describes an enforceable or unenforceable contract. An oral agreement to purchase a property

Unenforceable

Determine whether the example describes a bilateral or unilateral agreement. You own an "option to buy" on a property that says if you want to buy the place in two years for $20,000, you may.

Unilateral

Three frequently confused terms are valid, invalid, and voidable. Select the correct term for each example. A contract may be cancelled for one of a number of reasons - Voidable - Valid - Invalid

Voidable

Choose the appropriate text for each blank to complete the story. Ms. Arthur is buying a house from the Schumachers. Their contract has a _____1_____. Ms. Arthur is 20 years old, sane, and competent. Claude and Wilma Schumacher are 73 and 69 years old, respectively. This description meets the contract requirement of _____2_____. All three people understand what the contract means and want to go through with the transaction. This meets the contract requirement of _____3_____. And no one is acting under duress, which means that _____4_____ exists. Ms. Arthur worked with her real estate salesperson and lawyer to put together a written purchase offer contract. This fulfills the need for a real estate contract to be _____5_____. Ms. Arthur included a $5,000 earnest money deposit to make her offer more attractive. The Schumachers have accepted the offer and the buyer has agreed to pay $400,000.00 in exchange for the seller's promise to execute and deliver the deed, which is sufficient _____6_____. - legal purpose - in writing - offer and acceptance - consent - consideration - legally competent parties

1 - legal purpose 2 - legally competent parties 3 - offer and acceptance 4 - consent 5 - in writing 6 - consideration

Executed contract

A contract in which all terms have been fully completed

Executory contract

A contract in which some of the terms have not yet been completed

Express contract

A contract in which the parties to the contract have definitely agreed on all of the contract terms

Bilateral contract

A contract in which two parties make promises to each other

Valid contract

A contract that is binding and enforceable on all concerned parties because it contains all essential contract elements

Implied contract

A contract that is inferred from the parties' actions

Voidable contract

A contract that may or may not be enforceable between the parties, and usually means one party did not meet a legal requirement of the agreement

Unenforceable contract

A contract that will not stand up in court, but may still be valid if the parties want to complete performance

Unilateral contract

A contract which only one party makes a promise (to try to get the other party to do something)

Void contract

A contract with no legal effect, even when all of the essential elements for a contract exist

What is the statute of frauds? - A symbol of justice that depicts the legal system as always vigilant against deception - A federal law that requires all acts of fraud to be documented - An old English law that identified the degree of punishment meted out for acts of forgery - A law requiring contracts conveying ownership in real property to be in writing to be enforceable

A law requiring contracts conveying ownership in real property to be in writing to be enforceable

Determine whether the example describes a bilateral or unilateral agreement. You agree to buy a vacant property from a developer for $10,000.

Bilateral

Determine whether the example describes a bilateral or unilateral agreement. You'll get a haircut that costs $50.

Bilateral

Determine if the example describes an enforceable or unenforceable contract. Chet offers to buy Tina's property for $500,000. His written offer includes no earnest money. Tina accepts his offer.

Enforceable

Would this be considered "executed" or "executory"? A transaction has closed, and the parties have met all contract terms.

Executed

Would this be considered "executed" or "executory"? Mark's broker asks if the buyer and seller have signed a contract. Mark replies that the contract has been ______.

Executed

Would this be considered "executed" or "executory"? A transaction has closed, and the parties have met all contract terms.

Executory

Determine if the example describes an express or implied contract. You purchase a car from a dealer. You sign a purchase agreement detailing the transaction.

Express

Determine if the example describes an express or implied contract. You start a new job. You sign an employee agreement that spells out your salary and benefits package.

Express

True or false: The family of a mentally incompetent person would have no recourse if that person signed an agreement to build a new home and paid the deposit.

False the parol evidence rule grants final authority to the executed contract. But, outside evidence can be used to show that the contract is invalid when there has been a mistake, or worse, a case of fraud.

Determine if the example describes an express or implied contract. You order dinner at a fancy restaurant. Your bill is $500, and you are obligated to pay it.

Implied

Three frequently confused terms are valid, invalid, and voidable. Select the correct term for each example. A contract that is missing one or more essential elements - Voidable - Valid - Invalid

Invalid

Review the statement about the statute of frauds requirements for a real estate contract, and determine if it's a requirement under the statute of frauds. The contract subject matter must be clearly identified. - Is a requirement - Is not a requirement

Is a requirement

Review the statement about the statute of frauds requirements for a real estate contract, and determine if it's a requirement under the statute of frauds. The essential terms and conditions of the contract must be present. - Is a requirement - Is not a requirement

Is a requirement

Review the statement about the statute of frauds requirements for a real estate contract, and determine if it's a requirement under the statute of frauds. In addition to the written contract, there must also be an audio recording of an oral agreement between the contracting parties. - Is a requirement - Is not a requirement

Is not a requirement

Contracts frequently spell out numbers in addition to including the numeral, like this: 2 (two). If a contract included two numbers that didn't match, say, like this: 2,000 (three thousand), which number would take legal precedent if the number came into dispute? - 2,000 - Three thousand

Three thousand

True or false: If a seller says she'll leave the rugs in a house for a buyer, but doesn't include that provision in the executed contract, the seller isn't required to leave the rugs.

True

Determine whether the example describes a bilateral or unilateral agreement. You promise to pay a $100 reward if someone returns your phone.

Unilateral

Three frequently confused terms are valid, invalid, and voidable. Select the correct term for each example. A contract that includes all necessary elements and is signed by all parties - Voidable - Valid - Invalid

Valid

Determine if the example describes an enforceable or unenforceable contract. A written purchase agreement to buy a property, accepted in writing by the seller

enforceable