BUSA 310 Lecture 5 Contract only valid if there is an agreement in which both sides understand If a contract involves some sort of property and the property is destroyed the contract is void Mirror image contract equal on both sides Non compete clauses Employment term of employment that states if you leave the business you cannot work for a competitor for a certain amount of time Sales of Business sell a business and contract that the seller will not open another business of the same like for a period of time or within a certain proximity court will look at contract harm to other business and length of time and what the contract covers Exculpatory Clause enforce some sort of conduct relieves one party of liability Parking with tow at owner s expense signs as well as belongings being stolen Does not cover intentional conduct Can be voided by Public Policy Was the contract clear when signed 2 things of a contract 1 Has to be consideration something of value both ways 2 If you are a minor and enter into a contract it is voidable from the minor s perspective If you are mentally unsound but have not been declared by a court of law the contract may be voidable from the unsound person s terms Fraud1 The person making the statement has to know that the statement is false 2 Has to be a material misrepresentation 3 New person has to be liable rely on it Innocent mistake may not be fraud When do contracts have to be in writing Contract over 500 jurisdiction dependent Interest in land Has to be performed within a year or contract will be void If you re going to pay the debt of someone else college tuition If you re the executor of the estate In consideration of marriage buy new car if you marry me Third Party Beneficiaries Person may have the right to sue although they are not an original party in the contract Benefits third party Contracts can be assigned and delegated Under certain circumstances another party can be brought in and assigned a contract and both parties are now liable the original and the party that took over Give contract to someone else to fulfill your obligations Performance of a contract How well how fast and the amount spent in the contract Building a house run over time budget and mistakes occur Remedies of contract 1 Specific performance 2 Damages 3 Combination of both In Class exercise Due 9 25 Assume that Prof is buying a house valued at 150 000 and you are agreeing to work on the house in order to get it up to speed You are going to invest 15 000 in repairs on the house and it will take more than one year to complete Write a simple contract that covers the fraud in the contract and write as if you are the seller Maximum 1 page