Basic Contract Law

legally competent parties

People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legally enforceable contract

meeting of the minds

a deliberate agreement between parties, offer and acceptance meeting of the minds. A requirement of a legally enforceable contract

counteroffer

A new offer made in response to an offer received It has the effect of rejecting the original offer

consideration

(1) That received by the grantor in exchange for a deed (2) Something of value that induces a person to enter into a legally enforceable contract

Assessment

(1) The impostion of a tax, charge, or levy, usually according to established rates . (2) Official valuation of property for the purpose of establishing assessed value for tax purposes

executed contract

A contract in which all parties have fulfilled their promises in the contract

vaild contract

A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it

unenforceable contract

A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it For example, a verbal contract is generally unenforceable

void contract

A contract that has no legal force or effect because it does not meet the essential elements of a contract

voidable contract

A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties

executory contract

A contract under which something remains to be done by one or more of the parties

implied agreement/contract

A contract under which the agreement of the parties is demonstrated by their conduct

mutual assent

A deliberate agreement between parties; offer and acceptance; "meeting of the minds" A requirement of a legally enforceable contract

Auction

A form of selling property where oral bids are taken and the property is sold to the highest bidder

specific performance

A legal action to compel a party to carry out the terms of a contract

contract

A legal enforceable promise or set of promises between legally competent parties that must be performed for consideration if a breach of the promise occurs, the law provides a remedy A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed

unilateral contract

A one-sided contract wherein one party makes a promise to induce a second party to do something The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise

time is of the essence

A phrase in a contract that requires the performance of a certain act no later than a stated time or the noncompliant party is in breach and the contract may be voidable by the opposite party

parol evidence rule

A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contadicted by prior or contemporaneous oral or written negotiations

statute of frauds

A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contract, and certain leases

liquidated damages

An amount predetermined by the parties to a contract as compensation to an injured party if the other party breaches the contract

express agreement/contract

An oral or written contract in which the parties state the contract's terms and express their intentions in words

consequential damages

Award of special damages if the breaching party entered the contract with plans to breach; injured party may sue for lost profits

compensatory damages

Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party

earnest money

Money deposited by a buyer under the terms of a contract to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed

novation

Substituting a new contract for an old one or substituting new party to an existing contract

statute of limitation

That law pertaining to the period of time within which certain actions must be brought to court or be lost

rescission

The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions Contracts may be rescinded due to mistake, fraud, or misrepresentation There is no need to show any money damage

offer

The promise by one party to act or perform in a certain manner if the other party agrees to act or performs as requested; shows an intention to enter into a contract

legality of object

The purpose of a legally enforceable contract cannot be for illegal actions or acts against public policy

Breach of contract

The violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due

offer and acceptance

Two essential components of a valid contract; See mutual assent and acceptance

Bilateral contract

all parties (more than one) to the instrument are legally bound to act as prescribed, A legally enforceable promise of set of promises between legally competent parties that must be performed for consideration

reality of consent

if misrepresentation, fraud, mistake of fact, undue influence or duress are absent in contract formation, good contract is formed