ContractsLesson Three

Learning Objectives Understand the performance of contracts

as related to time limits. Know about assignment of a contract. Understand novation and the liability. Explain breach of contract and options. Review how contracts may be terminated. Understand the contractual process of

Executory and Executed.

Time is of the Essence

Assignment

Most Contracts can be Assigned

Novation

Example: The lender in anassumption substitutes thenew buyer for the previousborrower.

Breach of ContractAccept Partial PerformanceMutually Rescind the ContractFile Suit for Monetary LossAccept Liquidated DamagesFile Suit for Specific Performance

Termination of ContractsDeath of the PartyDestruction of the PropertyJudged IncompetentBankruptcyMutual Agreement

Expiration of TimeCompletion of ObjectiveRenouncesMisrepresentation of Facts

The Contract Process

“Irrevocable and Binding”Executory ContractExecuted (Legal Title)

Executory

Becomes

When Sold(offer & acceptance)

Equitable Title

Executed

At Act of Sale

(Legal Title transfers)