Business Law: Chapter 10
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Created by:
csriquelme on July 17, 2012
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Description:
Consideration, Capacity, and Legality
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20 terms
Terms | Definitions |
|---|---|
 Accord and Satisfaction | An agreement for payment (or other performance) between two parties, one of whom has a right of action against the other. After te payment has been accepted or other performance has been made, the "accord and satisfaction" is complete and the obligation is discharged. |
| Adhesion Contract | A "standard-form" contract such as that between a large retailer and a consumer, in which the stronger party dictates the terms. |
| Age of Majority | The age at which an individual is considered legally capable of conduction him/herself responsibly. A person of this age is entitled to the full rights of citizenship, including the right to vote. In contract law, the age at which one is no longer an infant and can no longer disaffirm a contract. |
| Consideration | Generally, the value given in return for a promise or a performance. The consideration, which must be present to make the contract legally binding, must be something of legally sufficient value and bargained for. |
| Contractual Capacity | The threshold mental capacity required by the law for a party who enters into a contract to be bound by the contract. |
| Covenant not to Compete | A contractual promise to refrain from competing with another party for a certain period of time an within a certain geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreement, and employment contracts. If they are ancillary to such agreements, covenants not to compete will normally be enforced by the courts unless the time period or geographic area is deemed unreasonable. |
| Covenant not to Sue | An agreement to substitute a contractual obligation for some other type of legal action (such as a personal-injury lawsuit) based on a valid claim. |
| Disaffirmance | The legal avoidance, or setting aside, of a contractual obligation. |
| Emancipation | In regard to minors, the act of being freed from parental control; occurs when a child's parent or legal guardian relinquishes the legal right to exercise control over the child. Normally, a minor who leaves home to support him/herself is considered emancipated. |
| Exculpatory Clause | A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault. |
| Forbearance | Refraining from an action that one has a legal right to undertake. |
| Liquidated Debt | A debt that is due and certain in amount. |
| Necessaries | Necessities required for life, such as food, shelter, clothing, and medical attention, and sometimes even including whatever is believed to be necessary to maintain a person's standard of living or financial and social status. |
| Past Consideration | Something that is given or some act done in the past and that ordinarily cannot be consideration for a later bargain. |
| Promissory Estoppel | A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies. Such a promise is binding if justice will be better served by the enforcement of the promise. |
| Ratification | The act of accepting and giving legal force to an obligation that previously was not enforceable. |
| Release | A contract in which one party forfeits the right to pursue a legal claim against the other party. |
| Rescission | A remedy whereby a contract is canceled and the parties are returned to the position they occupied before the contract was made; may be effected through the mutual consent of the parties, by the conduct, or by court decree. |
| Unconscionable | A contract or clause that is void on the basis of public policy because one party, as a result of her or his disproportionate bargaining power, is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party. |
| Usury | Charging an illegal rate of interest. |
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