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Texas Law of Contracts - Unit 3 - Introduction to contracts
Kaplan Real Estate, Texas
Terms in this set (56)
Legally/law enforceable agreement created by two or more competent parties who agree to perform or avoid performing certain acts that they have a legal right to do and that meets certain legal requirements
6 Elements of Enforceable Contract
Offer & Acceptance; Mutual agreement; consideration; competent parties; legality of subject matter; proper form
Offer and Acceptance
offer/proposal made by one party to another; acceptance is the indication made by the offered that he agrees to be bound by the terms of the offer
agreement to the terms between Offeror and Offeree " a meeting of the minds"
The exchange of promises... That which the promiser demands and receives as the price for a promise. Something of value (it can be money, property or a deed performed)
capable to understanding what they are doing, of legal age, and of normal mentality
Legality of purpose/subject matter
subject of the contract must be legal and not violate the law
Some contracts, in order to be valid, must be in writing and containing signatures of the parties
These are contracts that are fully performed. No action is outstanding or pending. The terms have been fulfilled.
These are contracts where the terms of the agreement have not been fully performed by either or both parties. This contract calls for future and anticipated action of goods or services not yet rendered.
Specifically states the agreements of the parties, either orally or written. The parties indicate their intentions at the time of the agreement.
One in which terms of the contract are implied by acts or conduct of the parties: from the custom of the trade or conditions or circumstances. No matter the industry, when entering contract with vendors certain items or conditions are understood in the "trade" and they are implied and don't have to be written.
Written agreement under seal. Contracts which must be in special form or produced in a certain way. Also called a specialty contract.
Contract of Adhesion
Take or leave it basis; common and normally enforceable contract
A contract formed when an act is done in consideration for a promise. Contract where only one party makes a promise or performs without securing a reciprocal agreement from the other party.
A proposal to make a contract:
1) definite and certain
3)intended to create an enforceable obligation
An agreement to an offer resulting in a contract The offeror has the right to dictate the method of acceptance
2) communicated to the offeror
3)mirror the offer (no deviation)
4) a counteroffer is interpreted as a rejection of the offer
The intentional misrepresentation of a material, or reckless false statement of a material fact, upon which the injured party relied, which induced the induced party to enter into a contract, at his/her detriment.
State of an untrue fact that results in inducing another to enter into an agreement which result in that person being injured.
1) Intentional Misrepresentation (Fraud)
2) Innocent Misrepresentation (unintentional)
Improper influence that is asserted by one dominant person over another to convince the weaker party to enter a contract that benefits the dominant party. (There MUST BE a special or confidential relationship between both parties) If undue influence is proves, the contract is voidable at the option of the wrongfully injured party.
The act of applying unlawful or improper pressure or influence to a person in order to gain his/her agreement to a contract. If Duress is found, the contract may be dissolved
An award paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff
An agreement which at the current time is not enforceable by law.
not in writing or signed by the parties- everyday transactions may be oral contracts
is reduced to writing on a permanent surface. (usually if the transaction is complicated or long duration) May be called a "memorandum of agreement)
2 or more parts that are dependent on each other. It cannot be divided into separate parts
2 or more parts independent of the other. It cn be divided
legally enforceable and has 6 elements of a contract
1) Offer and Acceptance
2) Mutual Agreement
4) Competent Parties
5) Legality of Purpose
6) Proper Form
lack one or more of the essential elements of a contract
may be rejected by one of the parties for a legally acceptable reason
NOT an offer but a REQUEST for an offer or invite to negotiate
1) regarded as an invitation to trade
2)don't contain sufficient words of commitment to sell
3) ONLY IF IT IS VERY SPECIFIC COULD IT BE AN OFFER
a conditional or qualified acceptance of an offer, NOT binding to both parties
Termination of Offer
1) Lapse of Time (within time specified or terminated within a reasonable time)
3) Rejection (direct, unqualified rejection or refusal to accept)
the annulment or cancellation of an instrument, act or promise by the one doing or making the offer
Proving a case of Fraud
Statement or act was:
1) a misrepresentation of a material fact
2) made with the knowledge of it's falsity or with reckless disregard of it's truth
3) made with the intention of causing the other party to enter an agreement
4) Relied on by the injured party
5) resulted in loss to in the injured party
granted to make a person whole- person is compensated for his/her loss
a belief that is not in accord with the facts. Requires both parties to be a part of the misunderstanding-it must be mutual.
Contract of Adhesion
1) contract drawn up by one party on a "take it or leave it" basis or accepted as is.
2) involve parties who have unequal bargaining power
3) sometimes unenforceable if the inequality is so unfair as to cause hardship
4) no negotiation (signing to the other party)
A one-sided contract that is oppressive and give unfair advantage to one of the parties. Highly unlikely to be enforced
Uniform Commercial Code- laws written to regulate commercial transactions
Where someone agrees not to do something that they have the right to do if they wish
the party making the promise
The party to whom the promise is received
Adequacy of consideration
(LEGALITY OF CONSIDERATION)...when a party to the contract challenges the value of the consideration claiming that he/she was misled and that the consideration involved in the contract was falsely or incorrectly valued.
Possiblity of Performance
(LEGALITY OF CONSIDERATION)... cannot be based on a promise that is impossible to fulfill. If it is difficult, it is not impossible to perform
Promise of Forbearance
promise of money by one party for the promise of an act by another.
A promise that one is already required to do either by law or by contract-NOT VLAID CONSIDERATION
Preexisting Duty Rule
Obligation to perform acts already required
A promise without requiring some benefit in return- not generally enforceable.
Agreements supported by past consideration
1)a promise to repay someone for a benefit after it has been received (generally not valid consideration)
Four Corners Doctrine
If it is not within the contract, it doesn't exist
legally competent parties
18, sane, and sober
Real Estate contracts must be what to be enforceable, according to the statute of frauds?
In writing and signed by the parties
A couple starts celebrating the sale of their home after their listing agent calls them with the news that they've received an acceptable offer. The listing agent says he is coming over to get their acceptance and signatures. However, by the time the agent arrives the sellers are completely inebriated. The agent has them sign the contract and then takes it to the title company. This contract is
a term applied to a contract that one or both parties have the ability to either withdraw from or enforce
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