Contract - a formal, legally binding agreement: an agreement between parties, creating mutual obligations that are enforceable by law.

 

all contracts must contain these elements to be valid.

• Offer

• Acceptance

• Awareness

• Consideration

• Capacity

• Legality

 

Statute of frauds - a law that deems certain types of verbal contracts non-binding and unenforceable without written evidence to support them.  Its job is to make sure both parties in a contract are protected from fraudulent behavior.

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Offer - an expression of a willingness to enter into a contract on certain terms; which must be firm, not ambiguous, or vague. 

 

Enforceable contract - a written or oral agreement that can be imposed in a court of law. If the law permits enforcement of a contract, execution of an agreement is the obligation of the assenting parties. Terms may not be violated or breached without causing the contract to void.

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Unenforceable contract - a written or oral agreement that will not be enforced by courts. There are many different reasons that a court may not enforce a contract. Contracts may be unenforceable because of their subject matter, because one party to the agreement unfairly took advantage of the other party, or because there is not enough proof of the agreement. 

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Voidable or voided contracts - are those that are null in effect due to one or both parties violating agreement with failure to perform or adhere to terms and conditions as promised. A credible defense must be found to cite void, giving the victim party the right to annul or rescind the agreement.

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Void contracts - Void contracts miss one or more essential element that would make it valid.  Because it's not an actual contract, neither party to it has to do anything to terminate it.

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Unilateral contract - only the offeror has an obligation. The offeree is not required to complete the task or action.

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Bilateral contract - both parties agree to an obligation and involve equal obligation from the offeror and the offeree.

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Option agreement - is a financial derivative contract between two parties that grants one party the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified period. 

 

Execution of a Contract - The term “fully executed” can apply to several different situations. First, when a contract is said to be “fully executed,” it means that all parties to the agreement have fully performed their obligations, or that all of the terms and conditions of the contract have been fulfilled in their entirety.

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The pros of e-signatures

• Accessible. 

• Secure. 

• Enable process automation.

• Improved records management. 

• Fast.

The cons of e-signatures

• May require advanced technology. 

• Trust. 

• Resistance to change. 

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Contract right - is the performance that is guaranteed to a person when they enter into a valid, legal contract with another person or entity.

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Compensatory damages - meant to reimburse a non-breaching party for financial losses suffered from a contract breach. They are used to make the non-breaching party whole again and can include expenses for loss of future earnings, hiring new parties to finish the contract, and so forth.

 

Restitution - aims to restore an injured party to the position they were in before a contract was formed. Since restitution is only used to return the injured party to their initial status, additional damages, such as those for loss of earnings or profits, will not be included in this amount.

 

Liquidated damages - Some contracts have provisions called a liquidated damages clause. The parties will select a pre-set amount of damages (i.e., liquidated damages). This pre-set amount is meant to mirror an estimate of the actual damages a party should obtain in the event of a contract breach. These typically occur in contracts where the subject matter may make it more difficult to foretell the number of actual damages.

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Nominal damages - Nominal damages are more of a symbol than any actual type of compensation. These are awarded when no genuine harm was done due to the breach of contract since nominal damages can be as low as a dollar since they represent more of a symbolic victory or matter of contract principles.

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Remedies in equity - refer to a different form of legal remedies, which have nothing to do with monetary awards.

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Punitive damages - A court may allocate punitive damages when there is an incentive to penalize and deter the offending party from re-committing such outrageous and offensive actions. Therefore, these damages are seldom awarded in contract cases, and if they are, many states have placed limitations on their amounts.

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Rescission - a remedy that cancels a contract from its inception, as if it never existed.

 

Termination -a remedy that ends a contract that already exists.  Refers to ending a contract based on the terms and conditions specified within the contract itself or under applicable law.

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Cancellation - another way to terminate a contract, but it usually arises from a breach by one or more parties.

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Amendment(alteration) - altering the original document, which may include supplementary information. 

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Addendum - informational or explanatory notes added to and made part of the existing contract once all parties involved have accepted it.

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Purchase agreement - a legally binding contract between a buyer and seller.

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Contingency contract - a legal document that sets out a condition needing to be met before the contract can be concluded.

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Lease - a contract a landlord and tenant use to outline their rights and responsibilities when the tenant rents residential or commercial property from the landlord.

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Lease purchase agreement - also known as a rent-to-own or lease-to-own agreement, lets someone rent a property for a specified period of time with the promise to purchase it at the end of the lease term.

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Full-Service Lease (Gross Lease) - tenants pay the base rent only.  

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Net leases - shift some expenses from the landlord to the tenant.

Single Net Lease (NN) - Tenants pay rent and property taxes.

Double Net Lease (NNN) - Tenants pay rent, property taxes, and insurance.

Triple Net Lease (NNN) - Tenants pay rent, property taxes, insurance, and all other expenses (maintenance, utilities, etc.).

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Modified Gross Lease - A modified gross lease combines elements of both gross and net leases.  Tenants pay a base rent, and the landlord covers some expenses (e.g., maintenance and insurance).  However, tenants may also be responsible for specific costs, such as utilities or property taxes.

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Absolute Net Lease - Tenants are responsible for virtually all expenses related to the property.  This includes rent, property taxes, insurance, maintenance, and even structural repairs.  Landlords typically have minimal obligations beyond property ownership.

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