Untitled Flashcards Set

Legal Purpose

A contract must have a legal purpose to be enforceable; illegal activities render it void.

Illegal Contracts

Contracts that involve illegal activities, such as committing a crime, are void and unenforceable.

Contracts in Restraint of Trade

Agreements that unreasonably restrict competition may be illegal under antitrust laws.

Examples of Illegal Contracts

Contracts to sell illegal drugs or to bribe someone are examples of void contracts.

Severability Clauses

Clauses that allow a contract to remain enforceable if the illegal part can be separated from the legal part.

Capacity to Contract

Both parties must have the legal capacity, defined by age, mental competence, and intoxication, to enter into a contract.

Minors

People under 18 generally lack legal capacity; their contracts are voidable.

Exception for Necessities

Contracts for necessities like food, shelter, or clothing are enforceable against minors.

Undue Influence

When one party uses their position of trust to persuade the other party to agree to a contract.

Duress

A contract is voidable if one party was forced or threatened into entering it.

Statute of Frauds

Certain contracts must be in writing to be enforceable to prevent fraud.

Contracts for Sale of Land

Any agreement involving real estate must be in writing according to the Statute of Frauds.

Writing Requirement

A written contract must include essential terms, such as identities of the parties and subject matter.

Fraud

Fraud in contracts occurs when one party intentionally misrepresents a material fact to deceive another.

Mutual Mistake

When both parties misunderstand a key fact in a contract, it may be voidable.

Unilateral Mistake

Only one party is mistaken; typically, the contract remains enforceable unless the other party knew of the mistake.

Promissory Estoppel

Enforcement of a contract can occur without writing if one party reasonably relied on an oral promise to their detriment.

Breach of Contract

A breach of contract occurs when a party fails to fulfill their obligations as specified in the contract.

Remedies for Breach

Possible remedies for breach of contract include damages, specific performance, and rescission.

Damages

Monetary compensation awarded to a party for losses due to a breach of contract.

Specific Performance

A legal remedy where the court orders the breaching party to perform their contractual obligations.

Rescission

The cancellation of a contract, returning both parties to their original positions.

Contractual Capacity

The legal ability of a party to enter into a contract; affected by age, mental state, and other factors.

Legality of Object

The requirement that the subject of a contract must be lawful; contracts for illegal acts are void.

Contractual Terms

The specific provisions and obligations agreed upon by the parties in the contract.

Assignment of Rights

The transfer of one's rights and obligations under a contract to another party.

Novation

The act of replacing one of the parties in a contract, with the consent of all parties involved.