Chapter 11 Section 1

Question 1

Lawful subject

Answer 1

-a contract must be for a lawful purpose and not contrary to public welfare

Question 2

offer and acceptance

Answer 2

-there must be an offer and acceptance, agreement, or meeting of the minds

Question 3

consideration

Answer 3

-contract must specify a sufficient consideration
-either valuable of good consideration may be sufficient
-valuable consideration is money or anything of value that can be converted to money
-love and affection which are incapable of being expressed in terms of money, are called good consideration

Question 4

competent parties

Answer 4

-a valid contract is an agreement between two or more competent parties
-an incompetent party can enforce a contract that cannot be enforced against them

Question 5

creation of contract

Answer 5

-contract is created when the offer of one party is accepted, and acceptance of the offer is communicated to the person who made the offer
-delivery of a contract to all parties is proof that communication has taken place

Question 6

acknowledgement

Answer 6

-accomplished when the parties appear before an officer of the court such as a notary public or judge
-acknowledgement is necessary if a document is to be recorded in the public records

Question 7

The statute of frauds

Answer 7

-real estate sales contracts, leases for more than one year, deeds, mortgages, and option contracts are covered by the statute of frauds
-an executed oral real estate sales agreement that reaches a successful conclusion is perfectly legal
-exception to statute of frauds exists when a buyer makes a partial payment and either takes possession of or makes improvements to the property

Question 8

statute of limitations

Answer 8

-provides the time limits during which parties are allowed to bring legal action to enforce their rights under a contract

Question 9

oral contracts

Answer 9

-if a contract is entirely oral, action must be brought within four years

Question 10

written contracts

Answer 10

-a contract wholly in writing may be enforced if action is brought within 5 years

Question 11

partially oral partially written

Answer 11

-a contract which is partially oral and partially written can be enforced based on whether the portion in dispute is oral or written and in accordance with the time limits above

Question 12

express contract

Answer 12

-all terms and conditions are specified and agreed to by the parties
-either oral or written

Question 13

implied contract

Answer 13

-some or all of the terms and conditions can be assumed by the nature of the agreement or the words and actions of the parties
-oral or written

Question 14

bilateral contracts

Question 15

unilateral contract

Answer 15

-only one party expressly agrees to perform an act

Question 16

executory contract

Answer 16

-any term of condition remains to be performed

Question 17

executed contract

Answer 17

-all parties have fully performed and the contract has been executed

Question 18

formal contract

Answer 18

-written, contains all the elements of a valid contract, and may be recorded in the public record

Question 19

informal (parol) contract

Answer 19

-oral agreement or a partially written contract between the parties that may or may not contain all the elements of a valid contract and is not recorded in the public record
-an informal contract can be valid, legal contract, but is not enforceable under the statute of frauds
-oral contracts are referred to as parol contracts

Question 20

void contract

Answer 20

-inherently unenforceable contract

Question 21

voidable contract

Answer 21

-a valid agreement that can be enforceable
-one or both of the parties to the contract can cancel or revoke the contract at any time

Question 22

assignment of contracts

Answer 22

-the sale, transfer, or subrogation of rights in a contract is called an assignment
-party who grants rights is assignor
-party who receives rights is asignee
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