exam2review - Contract law system of rules for enforcing...

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Contract law- system of rules for enforcing promises Roles of contracts: 1) Facilitation of mutually beneficial trade 2) Allocation of risk of future events Contract may be terminated by: 1) Performance 2) Breach 3) Discharge Executory Contract – has not been fully performed by either party - “Fix” future obligations - Ex: Agreement to repay a loan @ some future date w/a fixed rate of interest Presumably, all contracts are mutually beneficial when negotiated Least-cost Avoider of risk – Better @ minimizing the costs associated w/risk than other parties - Ex: Grain dealers who deal w/many people to avoid losing a lot of $ w/price fluctuations Types of contracts Express contract – one in which the terms of the agreement are fully & explicitly stated in words , oral or written Implied – in- Fact Contract – Conduct of the parties creates & defines the terms of the contract Ex: Getting a haircut Unconditional Contract – the only occurrence necessary to require performance is the passage of time Conditional contract – there will be no duty to perform if the condition has not been met 3 types of conditional contracts: 1) condition subsequent – a condition that follows the duty to perform Ex: company A&B enter a contract with a provision that contract is void in event of a takeover - The typical insurance contract includes both condition precedent and subsequent 2) condition precedent – A clause in a contract that identifies some condition or obligation – triggering event that must occur prior to the creation of an obligation 3) condition concurrent – only occur when the parties are to perform their duties simultaneously – ex: cash transaction for the sale of a good
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partially executed – one party has completed their part of the contract and the other hasn’t ex: if contract is executed as to mom, then she has performed her part Void contract – no contract at all & not recognized by law Ex: hiring a hit man Voidable contract – valid, but one party has right to void their obligations Unenforceable – Valid contract that cannot be enforced b/c of certain legal defenses Ex: law changes
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exam2review - Contract law system of rules for enforcing...

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