Also known as:valid agreements · enforceable agreement
Written by attorneys — see sources below.
A mutual understanding between two or more persons about their relative rights and duties that satisfies all legal requirements for enforceability. Mutual assent must be manifested, and any statute of frauds, writing, or other formal requirement imposed by applicable law must be met. An agreement meeting these standards binds the parties and supports remedies for breach.
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Common Examples
5
Landlord Damages Calculation
Vincente Vukovic leased commercial space from Villanueva Construction. The landlord failed to repair the roof as required, forcing Vincente to relocate and incur extra moving costs. Because the lease contained no clause fixing damages, the court applied the default measure and awarded Vincente the fair market value of the lease plus his reasonably foreseeable pre-default expenditures.
Account Debtor Defenses
Vega Motors assigned its accounts receivable from Victoria Vernon to Valor Capital. Victoria received proper notice of the assignment but had never signed any agreement waiving defenses. When Valor Capital sued for payment, Victoria asserted her original contract claims against Vega Motors, and the court permitted those defenses to reduce the amount owed.
Marital Property Exclusion
During their divorce, Dennis and Anne Graham disputed whether Dennis's professional degree counted as marital property. The couple had never executed any written agreement excluding educational achievements from division. The court therefore included the degree's value in the marital estate and divided it accordingly.
In re Marriage of Graham574 P.2d 75, 77 (Colo. 1978)
Anne P. Graham and Dennis J. Graham were married on August 5, 1968, in Denver, Colorado. Throughout the six-year marriage Anne worked full-time as an airline stewardess and contributed seventy percent of the financial support used for family expenses and Dennis's education. Dennis attended school for approximately three and one-half years of the marriage and obtained a bachelor of science degree in engineering physics and a master’s degree in business administration at the University of Colorado. The couple jointly managed an apartment house and Anne performed the majority of the housework and cooking. No children were born during the marriage and no marital assets were accumulated.
On February 4, 1974, the parties jointly filed a petition for dissolution in the Boulder County District Court. Anne did not make a claim for maintenance or attorney fees. After a hearing on October 24, 1974, the trial court found that the education obtained by Dennis during the marriage was jointly-owned property. The court evaluated the future earnings value of the M.B.A. at $82,836 and awarded Anne $33,134 payable in monthly installments of $100.
The Colorado Court of Appeals reviewed the trial court's decision in Graham v. Graham, 38 Colo. App. 130, 555 P.2d 527 and reversed it. The Supreme Court of Colorado then took up the case.
Seniority System Accommodation
Trans World Airlines scheduled Larry Hardison for Saturday shifts that conflicted with his religious observance. The airline and union had a valid collective-bargaining agreement containing a neutral seniority system. The court held that the airline need not violate that agreement to accommodate Hardison.
Trans World Airlines, Inc. v. Hardison432 U.S. 63, 84 (1977)
TWA operates a large maintenance and overhaul base in Kansas City, Missouri. On June 5, 1967, Larry G. Hardison was hired by TWA to work as a clerk in the Stores Department at its Kansas City base. The Stores Department must operate twenty-four hours per day throughout the year, and Hardison was subject to a seniority system contained in a collective-bargaining agreement that TWA maintains with the International Association of Machinists and Aerospace Workers.
In the spring of 1968 Hardison began to study the religion known as the Worldwide Church of God. One of the tenets of that religion requires observing the Sabbath by refraining from work from sunset on Friday until sunset on Saturday. Hardison informed Everett Kussman, the manager of the Stores Department, of his religious conviction. Kussman agreed that the union steward should seek a job swap for Hardison or a change of days off, that Hardison would have his religious holidays off whenever possible if he agreed to work traditional holidays when asked, and that Kussman would try to find Hardison another job more compatible with his beliefs. The problem was temporarily solved when Hardison transferred to the 11 p.m. to 7 a.m. shift.
Hardison later bid for and received a transfer to Building 2 on the day shift, where he ranked second from the bottom on a separate seniority list. When asked to work Saturdays during a fellow employee's vacation, TWA agreed to permit the union to seek a change of work assignments, but the union was unwilling to violate the seniority provisions of the contract and Hardison had insufficient seniority to bid for a shift with Saturdays off. A proposal that Hardison work only four days a week was rejected because his job was essential and alternatives would impair operations or require premium wages. Hardison refused to report for work on Saturdays, a transfer to the twilight shift proved unavailing, and after a hearing he was discharged on grounds of insubordination.
Hardison brought this action for injunctive relief in the United States District Court for the Western District of Missouri against TWA and the union after invoking administrative remedies under Title VII. Following a bench trial, the District Court ruled in favor of the defendants. The Court of Appeals for the Eighth Circuit reversed the judgment for TWA. Because it did not appear that Hardison had attacked directly the judgment in favor of the union, the Court of Appeals affirmed that judgment without ruling on its substantive merits. The Supreme Court granted certiorari on the petitions filed by TWA and the union.
Enforcement of Subdivision Restrictions
Van Dam purchased a lot in a subdivision subject to recorded covenants requiring single-family homes. Earlier buyers and the developer had entered a valid agreement imposing uniform restrictions across the entire tract. The court enforced the covenants against Van Dam because the common scheme rested on that enforceable agreement.
Snow v. Van Dam197 N.E. 224 (Mass. 1935)
On September 5, 1906, title to a tract of land at Brier Neck in Gloucester was registered in the name of Luce, from whom it soon passed to Shackelford. The tract was bounded northerly by a line through a pond near Thatcher Road, easterly by other land, southerly by the Atlantic Ocean, and westerly by Witham Road. The northerly part including what became lot D was low and marshy, while the southern part rose to a hill and slope suitable for summer residences.
In 1907, the land south of Thatcher Road was divided into about a hundred building lots. Between July 8, 1907, and January 23, 1923, almost all these lots were sold by Shackelford with uniform restrictions limiting each to one dwelling house costing at least $2500 and prohibiting outbuildings with privies without consent. On June 15, 1923, the remaining unsold land south of Thatcher Road was conveyed to J. Richard Clark subject to similar restrictions.
A revised plan in 1919 divided the northerly marshy land into parcels C, D, and E. On January 23, 1923, Shackelford conveyed these parcels to Robert C. Clark subject to restrictions allowing only one dwelling house per parcel costing at least $2500 unless otherwise approved. On February 18, 1933, Robert C. Clark conveyed the larger part of lot D to defendant Van Dam subject to the restrictions insofar as they remained in force.
The defendants erected a large building on lot D for selling ice cream and dairy products and operating as a common victualler. The plaintiffs, each owning a lot south of Thatcher Road with a summer residence, brought suit in Middlesex County seeking an injunction against the defendants for violating the restrictions.
5 common questions
Students Frequently Ask...
When does an agreement qualify as valid for purposes of measuring landlord-tenant damages?
An agreement qualifies when the parties have manifested mutual assent to its terms and any required formalities are satisfied. Absent such a valid agreement fixing damages, the tenant may recover the fair market value of the lease plus reasonably foreseeable expenditures made before the landlord's default.
Does a valid agreement between assignor and account debtor prevent assertion of defenses against the assignee?
Yes. An enforceable agreement by the account debtor not to assert defenses or claims binds the debtor and limits the assignee's exposure to those defenses. Without such an agreement, the assignee takes subject to all defenses arising from the underlying transaction.
How does a valid agreement affect division of marital property?
A valid agreement between spouses can exclude property from the marital estate. When no such agreement exists, property acquired during marriage is presumed marital and subject to equitable division.
Can a valid collective-bargaining agreement limit an employer's duty to accommodate religion?
A valid seniority system contained in a collective-bargaining agreement need not yield to religious accommodation when doing so would violate the neutral terms of that agreement. The duty to accommodate does not require breach of an otherwise lawful contract.
What role does a valid agreement play in enforcing subdivision covenants?
A valid agreement among developers and lot owners establishing a common scheme of restrictions allows later purchasers to enforce those covenants against subsequent buyers. The agreement supplies the mutual assent necessary to bind all lots within the restricted area.
to determine intent. Fuss v. Fuss (No. 2) , 373 Mass. 445, 449 (1977) (“The effect of a purported transfer will be determined by the design of the original transaction as understood by the…
ContractsFormation of contracts · Mutual assent (including offer and acceptance, and unilateral, bilateral, and implied-in-fact contracts)UBEIntermediate