Unit 6

Contracts

Definition

An agreement between two or more parties enforceable in court.

Elements of a contract

Competent parties Proper subject matter Offer Acceptance Consideration (detriment)

Competent parties

Age Sound mind Exception for necessaries Void versus voidable contracts

Proper subject matter

Not illegal Not (excessively) immoral

Meeting of the minds

Offer must contain material terms– Newspaper ads - invitation to make an

offer Acceptance must be unqualified

– Qualified acceptance is a counteroffer• Terminates offer

– Grudging acceptance

Consideration/Detriment

Exchange of value Need not be money

Types of contracts Express bilateral

– Promise for a promise Express unilateral

– Promise for an act– Exception to advertising exception

Implied (Quasi-contract)– Implied in fact (real contracts where assent

is implied)– Implied by law

• restitution to prevent unjust enrichment

Statute of frauds

Some contracts must be in writing to be enforceable

Current NC requirements Exceptions

– Partial performance– Promissory estoppel

Parol evidence rule

Written contract Prior or contemporaneous oral

statements barred– Except to clarify ambiguous terms

Subsequent oral statements admissible– Unless barred by an integration clause

Remedies

Money damages Specific performance Negative injunction Rescission and restitution

Defenses

Impossibility Impracticability Mistake

Stipulated (liquidated) damages

No penalties Reasonably related to actual damages

Time

Statute of limitations Laches (equity)