Reviewing Important Points

1 Unless required by law, contracts need not be in writing.

2 An express contract is stated in words, written or spoken. An implied contract is shown by conduct of the parties and by surrounding circumstances.

3 A formal contract must be in some special, written form. All contracts which are not formal contracts are simple contracts.

4 An executory contract has not been fully performed. An executed contract has been completed by both parties.

5 A quasi contract exists when some element of a valid contract is missing, yet the arrangement is enforced as if it were a contract. This is done to prevent unjust enrichment of one party.

6 To be enforceable, the following contracts must be in writing (or evidenced by some other written proof) and signed by the party against whom enforcement is sought:

a) contracts to buy and sell goods for a price of $500 or more;

b) contracts to buy and sell real property or any interest in real property;

c) contracts that cannot be performed within one year after being made;

d) contracts to pay a debt or answer for a legal obligation of another person;

e) contracts having marriage as the consideration;

f) contracts of an executor or administrator to be personally liable for the debts of an estate.

7 A memorandum of an agreement need not be in any special form. However, it must contain all the material facts and must be signed by the party against whom the contract is to be enforced.

8 The terms of a written contract may not be changed by parol evidence unless the writing is clearly ambiguous. Parol evidence may also be used to show that a written agreement is not binding because of mistake, fraud, or illegality.

LESSON 7 VOID OR VOIDABLE AGREEMENTS