Check Your Understanding Answers
- Explain performance and forbearance in contracts.
In contract language, "performance" means to do what one agreed to do. Some contracts require a party to refrain from doing something and that is called "forbearance". Contracts may include both performance and forbearance requirements.
- Define express and implied contracts.
An express contract is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing.
An implied contract is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement.
- List three types of contracts that California’s Statute of Frauds does NOT allow to be made orally. (Additional answers on page 15.)
- A contract for the sale or interest of real estate.
- An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate.
- A lease of real estate for a term longer than one year.
- What is needed to establish the existence of an implied contract?
To establish the existence of an implied contract, it is necessary to show an unambiguous offer, unambiguous acceptance, mutual intent to be bound, and consideration. However, these components do not need to be in writing or oral; they could be the actions of the parties.
