Chapter 2-1: Contract Law and the Formation of ContractsC

Unilateral Contract

only one party makes a promise without receiving any promise from the other party to the contract

Mutual Assent

a meeting of the minds and sometimes mutual consent.demonstrated by one party, the offeror, making the offer and the other party, the offeree, accepting the offer (known as the offeree)

Implied Contracts

are not created by an oral or written agreement, they must be deduced from the actions of the parties. are not favored over express contracts.

Express Contract

one having the necessary contract elements (competent parties, mutual assent, consideration, lawful object) explicitly stated by words, either written or oral.

Contracts in real estate must :

>be in writing >contain an adequate description of property >communicate acceptance of the offer back to the person who made the offer

Competent Parties are:

Age Criminal History (Felonies) Literacy Identifiable Parties Mental Capacity Legal Authority

Which one of the following is NOT valuable consideration? An act for a promise to do something An act for a promise not to do something An act for an act An act of love and affection

An act of love and affection

Four elements for a contract to be valid

Competent parties, Mutual assent, consideration, legality of purpose

Which best describes the contract element of consideration?Consideration is something of value given by one party in exchange for something of value from another party. Consideration is something that has value to one party, and is a detriment to the other party in a contract. Consideration is defined as the thoughtfulness the parties express to each other during executory period. Consideration is something of value given to one party to a contract.

Consideration is something of value given by one party in exchange for something of value from another party.

Contracts are classified as:

Express or Implied Unilateral or Bilateral Executed or Executory

Executory

a contract that has not yet been fully executed (performed) by the parties

TRUE OR FALSE: Oregon Revised Statutes prohibits the use of a tax lot number as the description of the property

TRUE

Statuatory Law

define written law usually enacted by a legislative body

acceptance

offeree's affirmative response to the offer. must be unqualified, definite, voluntary, and genuine assent to the offer

Consideration

something of value provided by one person to the contract in exchange for something of value from the other person to the contract.Contracts must be supported by consideration, or the contract will be void.

Legality of Purpose

the contract element that requires the object of the contract to be legal. the purpose or object of the contract is legal and enforceable; promise, intent, and content must be lawful; if illegal, the contract is void - cannot contract to break the law.

A felon can do all of the following EXCEPT marry. buy and sell real property. vote while incarcerated. make a will.

vote will incarcerated

Restatement of the Law of Contracts

basic principals of contract law that apply to todays real estate brokerage.

Contract Law

body of rules consisting of common law and statutory law that regulate the formation, interpretation and enforcement of promises

Ways to reach age majority

by reaching 18 years of age, by marriage (a 17-year-old individual can marry with parental consent), or by emancipation.

Executed

contract is one that has been fully performed by the contracting parties

Bilateral Contracts

contracts with mutual promises each party can enforce the contract against the other.

Contracts in regards to minors

do not have the legal capacity to enter into contracts

Two most frequently used contracts

listing and sales agreements