RE Ch. 6: Legal Classification of Contracts - Terms

Valid Contract

a valid agreement between two parties

Bilateral Contract

Most contracts are bilateral.

In a bilateral contract, both parties promise to do something. They exchange promises with one another, and they are both legally obligated to perform as promised.

Meeting of the Minds (mutual assent)

A deliberate agreement between parties; offer and acceptance; a requirement of a legally enforceable contract.

Mailbox Rule

Acceptance is generally effective upon dispatch. Terminations are effective when received.

Undue Influence

Undue influence can be described as persuasion strong enough to overpower another person's will, and prevent that person from acting intelligently and voluntarily.

Consideration

Consideration is something of value that one party to a contract gives to the other. It can be anything: money, property, services, or a promise to provide something of value in the future.

List of Cali's Statute of Fraud

1. An agreement that is not to be performed within a year of its making, or not during the lifetime of the promisor;

2. An agreement for the sale or exchange of real property;

3. A lease of real property that will expire more than a year after it was agreed to;

4. An agency agreement authorizing an agent to purchase or sell real estate;

5. An agency agreement authorizing an agent to find a buyer or seller for real property, if the agent will receive compensation; and

6. An assumption of a mortgage or deed of trust.

Doctrine of Lashes

A court may also bar a legal claim under the doctrine of laches.

Unlike the statute of limitations, which sets a specific deadline for filing a claim, the doctrine of laches is invoked when a party has delayed making a claim for so long that it would be unfair to the other party to allow the claim.

Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

Cancellation

Cancellation is similar to rescission, but there's an important difference.

In canceling a contract, the parties agree to terminate it without undoing whatever steps they've already taken.

If money has changed hands, the party who received can keep it.

Assignment

In various circumstances, one of the parties to a contract may want to withdraw and have someone else take his place. This is called assignment.

One of the original parties, the assignor, assigns his interest in the contract to a new party, the assignee.

Novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Breach of Contract

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

Liquidated Damages

An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.

Tender

A tender is an unconditional offer to perform as agreed.