Business Law Chapter 10
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28 terms
Terms | Definitions |
|---|---|
 scienter | Knowledge on the part of the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive. |
| anticipatory repudiation | An assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time. |
| assignment | The act of transferring to another all or part of one's rights arising under a contract. |
| breach of contract | The failure, without legal excuse, of a promisor to perform the obligations of a contract. |
| commercial impracticability | A doctrine under which a court may excuse the parties from performing a contract when the performance becomes much more difficult or costly due to an event that the parties did not foresee or anticipate at the time the contract was made. |
| condition | A qualification, provision, or clause in a contractual agreement, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties. |
| condition precedent | In a contractual agreement, a condition that must be met before a party's promise becomes absolute. |
| consequential damages | Special damages that compensate for a loss that does not directly or immediately result from the breach (for example, lost profits). For the plaintiff to collect consequential damages, they must have been reasonably foreseeable at the time the breach or injury occurred. |
| delegation | The transfer of a contractual duty to a third party. The party delegating the duty (the delegator) to the third party (the delegatee) is still obliged to perform on the contract should the delegatee fail to perform. |
| discharge | The termination of an obligation. In contract law, discharge occurs when the parties have fully performed their contractual obligations or when events, conduct of the parties, or operation of law releases the parties from performance. |
| frustration of purpose | A court-created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists (due to reasons beyond that party's control). |
| impossibility of performance | A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes objectively impossible or totally impracticable (through no fault of either party). |
| incidental beneficiary | A third party who incidentally benefits from a contract but whose benefit was not the reason the contract was formed; an incidental beneficiary has no rights in a contract and cannot sue to have the contract enforced. |
| intended beneficiary | A third party for whose benefit a contract is formed; an intended beneficiary can sue the promisor if such a contract is breached. |
| liquidated damages | An amount, stipulated in the contract, to be paid in the event of a default or breach of contract. The amount must be a reasonable estimate of the damages that would result from a breach in order for the court to enforce it as liquidated damages. |
| mitigation of damages | A rule requiring a plaintiff to do whatever is reasonable to minimize the damages caused by the defendant. |
| mutual rescission | An agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract. The object of the agreement is to restore the parties to the positions they would have occupied had no contract ever been formed. |
| novation | The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. Typically, novation involves the substitution of a new party for one of the original parties to the contract. |
| penalty | An amount, stipulated in the contract, to be paid in the event of a default or breach of contract. When the amount is not a reasonable measure of damages, the court will not enforce it but will limit recovery to actual damages. |
| performance | In contract law, the fulfillment of one's duties arising under a contract with another; the normal way of discharging one's contractual obligations. |
| quasi contract | A fictional contract imposed on parties by a court in the interests of fairness and justice; usually imposed to avoid the unjust enrichment of one party at the expense of another. |
| reformation | A court-ordered correction of a written contract so that it reflects the true intentions of the parties. |
| restitution | An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been in had the breach not occurred. |
| specific performance | An equitable remedy requiring exactly the performance that was specified in a contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property). |
| Statute of Frauds | A state statute under which certain types of contracts must be in writing to be enforceable. |
| tender | An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so. |
| third party beneficiary | One for whose benefit a promise is made in a contract but who is not a party to the contract. |
| voluntary consent | Knowledge of, and genuine assent to, the terms of a contract. If a contract is formed as a result of a mistake, misrepresentation, undue influence, or duress, voluntary consent is lacking, and the contract will be voidable. |
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