Chapter XVIII - Contracts Leases Guarantees

  • 1. Requisites to a contract.
  • 2. The consideration.
  • 3. Written and verbal contracts.
  • 4. Forms of contract.
  • 5. Kinds of contract.
  • 6. A lease.
  • 7. As to repairs.
  • 8. Sub-letting.
  • 9. What is a guaranty?
  • 10. A bill of sale
  • 11. Obligations.

The law books define a contract to be "An agreement between two or more persons to do or not to do a certain stated thing or things, for a consideration."

The consideration is a vital part of every contract.

There can be no binding contract without a consideration.

The other requisites of a contract are--

1. It must be possible of accomplishment. 2. It must be in accordance with law. 3. Its performance must not injure the public. 4. The parties to a contract must be competent to do the things to which they pledge themselves. 5. A drunken or an insane man cannot make a contract. 6. All parties to a contract must be agreed.

THE CONSIDERATION

No contract can be held as binding where the consideration is not named.

A promise, verbal or in writing, to do something for a certain party, cannot be enforced.

A promise to do the same thing for a stipulation named is a contract and may be enforced.

A gift is not a form of contract. Once made it cannot be legally taken back.

WRITTEN AND VERBAL CONTRACTS

There are certain forms of contract which cannot be legally enforced, unless they are in writing.

1. All contracts for the sale of real estate. 2. Contracts that are not to be performed for a year or more. 3. All contracts, to answer for the debt and obligations of another, must be in writing.

If the contracting parties put but a part of their agreement in writing the law will recognize only the written part. The whole must be in writing, or the agreement will not hold.

Verbal contracts are not safe.

Although the law does not require even contract to be in writing, yet, as it never declares that a contract must be verbal, it is the part of prudence, wherever possible, to put every contract in writing.

Owing to defects of memory even honest men may, and frequently do, disagree as to the terms of a verbal contract.

Because the party with whom the contract is made is a close friend, one is apt to depend on a verbal agreement, but the closer the friend or relative, the more reason there is for an exact written contract, if we would keep the friend.

FORMS OF CONTRACT

The law is never specific as to the form of contract that may be used.

It is not necessary to draw up the contract with the formal accuracy of a real estate deed.

Any one with good sense and a fair common school education can draw up a contract that will hold.

Know what is required, then state the facts simply.

Contracts need not be sworn to or even witnessed.

KINDS OF CONTRACT

Every note, mortgage and other form of obligation is a specific contract.

A lease is a form of contract between two people, known as landlord and tenant, for the use of real estate for a period and at a rental specified in the document.

A verbal lease may be made for a short period, but if for a year or more, it must be in writing.

A lease should state when, where and to whom the rent is to be paid.

Each party to a lease, or other form contract should have a copy.

If the premises rented should become unusable by fire or any action of the elements the tenant is still liable for rent, unless there is a special clause in the lease providing for such a contingency.

A tenant cannot, without the written consent of the landlord, use the rented premises for any other purpose than that stated in the lease.

Contracts Leases Guarantees Page 02

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