Valid, unenforceable, voidable and void contracts

A valid contract is one that meets all the legal requirements for a contract. Valid contracts are therefore enforceable in court.

An unenforceable contract is one that meets the basic legal requirements for a contract but will not be enforced due to some other legal rule.

A voidable contract is one that may be cancelled by one or both of the parties. It is enforceable against both parties unless a party with the right to cancel the contract has done so. For example, if Frank buys a used car from Honest Bob’s Used Cars and Frank is a minor, the parties have a voidable contract. It is binding and enforceable against both parties unless Frank decides to cancel the contract.

The void contract lacks one or more of the basic requirements for a contract. Such an agreement has no legal force or effect. An example is an agreement to steal a car. One of the basic requirements for a valid contract is that the thing the parties have agreed to do is legal. Stealing a car is illegal; therefore, such an agreement would be considered void.

EXPRESS AND IMPLIED CONTRACTS

A contract is express when the parties have directly stated its terms at the time the contract was formed. They may have done this orally or in writing. So, when Bill tells Joe, “I’ll sell you my 1983 Camaro for $10,000,” and Joe replies, “You’ve got a deal,” an express contract has been created.

There are many cases, however, in which the parties have clearly reached an agreement, even though they have expressly stated its terms. When the surrounding facts and circumstances indicate that an agreement has in fact been reached, an implied contract is created. Suppose you go to your dentist for treatment. Ordinarily you would not expressly state the terms of your mutual agreement beforehand, although it is clear that you do, in fact, have an agreement. A court would infer a promise on the part of your dentist to use reasonable care in treating you and a promise on your part to pay a reasonable fee for the dentist’s services.

EXECUTED AND EXECUTORY CONTRACTS

A contract is executed when all the parties have fully performed their duties under the contract. A contract is executory as long as it has not been fully performed. A contract is partially executory when one person has performed his promise under the contract, but the other person has not performed hers.

A QUASI CONTRACT

A quasi contract is a legal fiction created by the court to avoid injustice. The basic idea is that quasi contract applies where one of the parties voluntarily receives a benefit from the other party under circumstances that make it unfair to keep the benefit without paying for it.

The elements of a contract

A contract always requires the presence of four components, but sometimes requires five. The five are:

• Mutual assent

• Consideration

• Possession of contractual capacity by the parties

• Legal objectives

• A writing, if required by statute

Mutual assent, the essential prerequisite for every enforceable contract.

The law of contracts does not require that the consideration of each party be of equal value. Its only requirement is that the consideration have legal value, that is, some economic value no matter how slight.

A frequent question in cases involving disproportionate consideration is the capacity of the parties to contract. “Capacity” means “competency,” or the ability to understand the nature of the contract. Note that the term refers to the ability to understand, not to whether a party actually understood. In other words, the capacity requirement does not protect people who misunderstand a bargain or who do not read contracts. Rather, the law permits certain categories of persons – minors, the mentally ill, and the intoxicated – to disaffirm, or void, their contracts. Contracts with persons whom a court had declared legally incompetent before the time of contracting are automatically void.

By definition, a contract must have legal objectives, since a court will not enforce illegal ones. Some contract-like arrangements are prohibited by law. Arrangements to fix prices or to purchase illegal drugs are just two examples.

The final requirement, a writing – a written contract – only comes into play when a statute actually requires one. Written contracts are not the norm; oral contracts are.

Learn the words and word combinations on the theme “Contract”

CONCLUSION OF ЗАКЛЮЧЕННЯ