1. [CONTRACT ENFORCEMENT]
LA3100 Lear ning Plan 4

2. [REVIEW]
Review: Contract Classification
 Express Contract
 Implied Contract
 Bilateral Contract
 Unilateral Contract
 Executory Contract
 Executed Contract
 Valid Contract
LA3100L P 3

3. [REVIEW]
Review: Contract Classification
Unenforceable Contract
An unenforceable contract is a contract that is otherwise valid, but
cannot be enforced, because fails to meet a certain requirement.
Void Contract
A void contract is a contract that is void and without legal effect
from its attempted creation.
Voidable Contract
A voidable contract can be avoided by one or both of the parties.
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4. Lear ning Plan 3LA3100
VOID AND
VOIDABLE
CONTRACTS
[CONTRACT ENFORCEMENT]

5. [VOIDABLE & VOID CONTRACTS]
Even if an agreement has the required elements to
form a contract, these factors can make the
agreement unenforceable:
1. Party lacked capacity.
2. Involuntary agreement of a party.
3. Statute of Frauds violation.
4. Illegality.
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6. [VOIDABLE FOR INCAPACITY]
Anyone can form a contract. But in many states, laws
protect certain people from enforcement of contracts, by
creating voidable contracts, such as:
1. Persons under the age of 18 years (minors)
2. Persons who are mentally incompetent
3. Persons under the influence of alcohol or drugs
During the development of contract law, it was recognized
that these groups of people might not understand the
consequences of entering into a contract-that they lacked
capacity.
Remedy: Excuse from performing.
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7. [VOIDABLE FOR INVOLUNTARY PARTY]
A contract must be a voluntary agreement to be
enforceable. Situations in which consent may not
have been voluntarily given:
1. Mistake
2. Fraud
3. Duress
4. Undue Influence
These situations create a voidable contract.
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8. [VOIDABLE BY MISTAKE]
Mutual Mistake.
1. Both parties are mistaken about a material fact.
2. Either party may rescind (cancel) the contract.
Remedy: Consideration returned by both parties.
Unilateral Mistake.
1. One party mistaken about a material fact,
2. Misrepresentation: knowledge of the mistake,
term ambiguity.
Remedy: Recission allowed if there is
misrepresentation.
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9. [VOIDABLE BY FRAUD, DURESS, INFLUENCE]
Fraud: Intentional misrepresentation of a fact.
Duress: Contract created under wrongful threat.
Undue Influence: Contract created by
manipulation of a party’s confidence-”Trust me!”
Remedy: The harmed party can recind or sue the
fraudulent party for resulting damages.
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10. [VOID BY ILLEGALITY]
Generally, a court will not enforce an illegal
contract. As a result, the court system is not
available to the parties in the event of a contract
dispute.
1. A contract to commit a crime
2. A contract to commit a tort
Remedy: None.
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11. [VOID PER STATUTE OF FRAUDS]
Statute of frauds requirement of express contracts
in certain situations:
1. Sale of land.
2. Duration of more than one year.
3. Over a specified dollar amount ($500).
Remedy: A person may be able to recover the
reasonable value of the performance/consideration
as a quasi-contract.
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12. [ASSIGNMENTS OF CONTRACTS]
Certainly, a contract may be enforced by the original
parties to a contract. However, in many cases a
contract may also be enforced by other parties,
including:
1. Assignees
2. Third Party Beneficiaries
The person making the assignment is called the
assignor and the person receiving the assignment is
called the assignee.
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13. [CONTRACTS NOT ASSIGNABLE]
Courts generally favor parties’ rights to
contract, including the right to assign contracts.
However, some assignments are prohibited:
1. Statutory prohibition.
2. Assignment prohibition clause.
3. Unique, personal service contracts.
4. Burden-increasing assignments.
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14. [BENEFICIARIES OF CONTRACTS]
A contract need not be assigned to be enforced by
a person who is not a party to the original contract.
A contact may also be enforced by a beneficiary of
the contract. Examples:
1. Creditor beneficiary
2. Donee beneficiary
3. Incidental beneficiary
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15. Lear ning Plan 3LA3100
BREACH
[CONTRACT ENFORCEMENT]

16. [ENFORCING A BREACH]
BREACH OF CONTRACT
 When parties enter into a contract, they generally
do not intend to breach (break) the contract.
 Breaches are anticipated, however. Often, the
remedy is included as a clause in the contract.
 If there is no clause predetermining damages, it is
often difficult to determine the appropriate remedy
for a breach.
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17. [CONTRACT CONDITIONS]
 In determining whether a contract has been
breached, it is necessary to review the conditions
of the contract.
 A condition is an event that creates, limits, or
terminates a party's duty to perform under the
contract. (aka a “term” of the contract).
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18. [CONTRACT CONDITIONS]
 Condition Precedent: One party is obligated to
perform a duty before the other party is obligated
to perform.
 Condition Concurrent: Both parties to the
contract must perform their duties at the same
time.
 Condition Subsequent: A condition that
terminates an existing duty to perform.
 Express Condition: Term written into the
contract.
 Implied Condition Assumed term based on
circumstances.
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19. [CONTRACT ENFORCEMENT
Lear ning Plan 3LA3100
DAMAGES

20. [DAMAGES]
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Compensatory damages: Puts the nonbreaching party in the
monetary position that the party would have been had no
breach occurred and the contract had been fully performed.
Consequential damages: Additional award, if at the time the
contract was made, a reasonable person could have
expected that such damages would have resulted.
Liquidated damages. A set dollar amount awarded only if:
1. Actual damages difficult to predict at formation.
2. Reasonable amount; does not constitute a penalty.
Equitable remedies: When monetary damages insufficiently
remedy, specific performance can order the breaching party
to fulfill his obligations.

21. [DUTY TO MITIGATE DAMAGES]
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A nonbreaching party has a duty to
mitigate damages (personally attempt to
recover loss).

22. [CONTRACT ENFORCEMENT]
LA3100 Lear ning Plan 4