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© 2008 by South-Western, Cengage Learning
Chapter 8Chapter 8
Charles J.Jacobs
Thomas E.Gillett
© 2008 by South-Western, Cengage Learning
Georgia Real EstateGeorgia Real EstateAn Introduction to the ProfessionAn Introduction to the Profession
Seventh EditionSeventh Edition
Chapter 8Chapter 8
Contract LawContract Law
© 2008 by South-Western, Cengage Learning
Expressed – oral or verbal declaration
Implied - created by action
© 2008 by South-Western, Cengage Learning
Bilateral and Unilateral ContractsBilateral and Unilateral Contracts
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Legally Competent Parties
Mutual Agreement
Lawful Objective
Consideration
© 2008 by South-Western, Cengage Learning
Legal Effect of ContractsLegal Effect of Contracts
Valid – all essential elements present
Void – missing at least one essential element
no legal effect & not a contract
Voidable – one or more elements may be removed by the injured party
Invalid – once was valid but validity has ceased
© 2008 by South-Western, Cengage Learning
Legal Effect of ContractsLegal Effect of Contracts
Court would allow and uphold
Court would notallow and uphold
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Legally Competent PartiesMinors
Intoxicated Persons
Power of AttorneyAttorney-in-fact
Corporations
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Mutual Agreement - Meeting of the minds
Offer, Acceptance &
Communication
Counteroffer
© 2008 by South-Western, Cengage Learning
Meeting of the MindsMeeting of the Minds
© 2008 by South-Western, Cengage Learning
Meeting of the MindsMeeting of the Minds
© 2008 by South-Western, Cengage Learning
Meeting of the MindsMeeting of the Minds
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Mutual AgreementFraud
Innocent Misrepresentation
Mistake
Contractual Intent
Duress, Menace, Undue
Influence
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Lawful Objective
Consideration – Something of valueExchange of Promises
“For ten dollars and other good and valuable consideration”
Earnest Money is not consideration
© 2008 by South-Western, Cengage Learning
Essential ElementsEssential Elements
Contract in WritingStatue of Frauds
Parole Evidence Rule
Executory, Executed, Execute
© 2008 by South-Western, Cengage Learning
PerformancePerformance
Most contracts are discharged by being fully performed
Novation – Substitution of new contract or new parties
Deceased Party
Property Damage
© 2008 by South-Western, Cengage Learning
Breach of ContractBreach of Contract
Partial performance
Unilateral rescission
Lawsuit for damages
Lawsuit for specific performance
Liquidated damages
Mutual Rescission
Statute of Limitations
© 2008 by South-Western, Cengage Learning
Key TermsKey Terms
Breach of contract
Competent party
Consideration
Contract
Counteroffer
Duress
Fraud
Liquidated damages
Power of attorney
Specific performance
Void contract
Voidable contract