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INTRODUCTION TO COMMMERCIAL REAL ESTATE MANAGEMENT 490 October 28, 2009

Next Two Classes: Contracts

General Contract Law Principles

Commercial Real Estate Contracts

RANM Form ______ Vacant Land Sale and Purchase Agreement

What is a Contract?

Legally enforceable agreement to do (or not do something)

Express Contract Implied Contract

Bilateral Contract
Unilateral Contract

Legal Effect of Contracts

Enforceable
Void

Never went into effect

Voidable

Obligations can be avoided by a party

Unenforceable

Once enforceable, but no longer enforceable

Essentials of a Valid Contract

Competent Parties

Minors Incapacitated Persons Duress Power of Attorney Entities

Corporations Limited liability companies Trusts

Essentials of a Valid Contract

Mutual Agreement/Meeting of the minds

Complete agreement on all essential terms

Offer and Acceptance

Accept Reject

Counteroffer

Acts like a new offer that can be accepted or rejected

Essentials of a Valid Contract

Lawful Objective

Unlawful Against public policy

Consideration

Legal consideration Exchange of promises Adequacy of consideration

Essentials of a Valid Contract

Contract must be in writing

Statute of Frauds New Mexico Statute of Frauds Why should contracts be in writing? Parole evidence rule

New Mexico rule-almost anything can be ambiguous

When a Contract May not be Valid

Fraud

Intention to deceive

Misrepresentation

Reckless Negligent

Mutual mistake

Mutual mistake of fact (not law)

Lack of Capacity

Performance of Contracts

Performance/Discharge of Contracts
Assignment of Contracts

personal contracts not assignable

Novation

Substitution of a new contract

Inability to Perform

Deceased person Corporate existence ceases

Breach of Contract

Failure to perform vs. default

Notice and cure periods Usually governed by terms of contract If not, law will determine when default occurs No remedy until there is a default

Remedies for Default

Partial Performance
Unilateral Rescission Money Damages

Incidental damages Consequential damages Attorneys fees and costs

Liquidated Damages Specific Performance Mutual Rescission

Defenses against Enforcement

Statute of Limitations

Purpose New Mexico: suit must be brought within six years for an action based on breach of a written contract New Mexico: four years for fraud or negligence claims