Contracts
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Created by:
lakeandbake on October 17, 2010
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93 terms
Terms | Definitions |
|---|---|
 Restatement Definition | a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty |
| Practical Definition | A set of legally enforceable promises |
| Agreement | Offer and Acceptance |
| Consideration | Bargained-For exchange |
| Contractual Capacity | Legally ability to enter a binding contract |
| Legal Object | Contract must have lawful purpose or subject |
| Lack of genuine assent | Offeror has secured acceptance of offeree thorugh improper means |
| Lack of proper form | Statute of frauds requires contract to be in writing |
| Sources of Contract Law | State common law- derived from english common law Uniform Commercial Code |
| Bilateral Contract | a promise made by one party in exchange for the promise of another party; a promise for a promise |
| Unilateral Contract | Promise in exchange for a performance. (one-sided promise) |
| Express Contract | Based on written or spoken words |
| Implied Contract | Based on conduct/actions of parties |
| Quasi Contract | contract implied by law to prevent unjust enrichment and unjust detriment |
| Valid Contract | All elements of contract formation satisfied |
| Void Contract | Illegal purpose, illegal subject matter, improper form |
| Voidable Contract | One or both parties can withdraw from contract |
| Executed Contract | All terms of contract fully performed |
| Executory Contract | Some duties under contract not performed by one/ both parties |
| Formal Contract | Must meet special form requirements |
| Informal Contract | No formalities required in making a simple contract` |
| Element of valid offer 1 | manifestation of offerors intent to be bound |
| Elements of valid offer 2 | Definite and certain terms such as subject matter, price, quantity, quality, and parties |
| Elements of valid offer 3 | Communication of offer to offeree, or offeree's agent |
| Auctions with reserve | seller merely expresses intent to recieve offers |
| Auction without reserve | Seller must accept highest bid |
| Five ways to terminate offer | 1. Revocation by offeror before acceptance 2. Rejection by offeree 3. Death or incapacity of offeror 4. Destruction of subject matter or subsequent illegality of subject matter 5. Lapse of time/ failure of conditions specified in offer |
| Acceptance | Manifestation of offeree's intent to be bound by terms of offer and resulting contract |
| Mailbox Rule | acceptance becomes effective on dispatch (when sent by mail), revocation becomes effective only when received by offeree |
| Consideration | Something of value, given in exchange for something else of value, that is the product of a mutually bargained for exchange |
| Benefit to promisor | Ex. Employee promised to stay in job until project is complete |
| Detriment to promisee | Ex. Pro NFL player promised to not ride a motorcycle |
| Promise to do something | Ex. Promise to clean the house |
| Promise to refrain from doing something | Ex. Promise to not drink alcohol during finals |
| Consideration Rule # 1 | For a promise to be legally enforced by the courts, there generally must be consideration |
| Promissory Estoppel | One party makes a promise knowing other will rely on it, other party relies on promise, only way to avoid injustice is to enforce the promise |
| Consideration Rule #2 | Courts rarely consider the adequacy of consideration |
| Consideration Rule #3 | Illusory promise does not constitute consideration |
| Illusory Promise | Party appears to commit to something, but does really has not committed at all |
| Consideration Rule #4 | Past consideration does not constitute consideration for purposes of present contract |
| Consideration Rule #5 | Promise to do something you are already legally obligated to do is not valid consideration |
| Pre-Existing Duty role | 1. Performance of a duty you are obligated to do under the law is not good consideration 2. Performance of an existing contractual duty is not good consideration |
| Requirement Contract | Under which 1 party agree to purchase its entire requirement of specific goods or services exclusively from another party for a specific period of time. No consideration |
| Output Contract | a contract in which you promise to deliver your entire output to the other party who promises to accept it |
| Liquidated Debt | the parties agree that the debt exists and on the amount of the debt |
| Unliquidated Debt | the amount the debt is not certain and under debate by the parties |
| Contractual Capacity | Mental ability to understand rights and obligations established by contract, with the presumptive ability to understand how to comply with terms of agreement |
| Capacity General Rule | Natural persons over the age of 18 are presumed to have full legal capacity |
| Limited Capacity to Contracts | 1. Minors 2. Mentally incapacitated persons 3. Intoxicated Persons |
| Contractual Power of Avoidance(Disaffirmance) | Minor's right, until a reasonable time after reaching age of majority, to disaffirm, or avoid, their contracts, Designed to discourage entering contracts with minors |
| Contract for necessaries | contracts that supply minors with basic necessities of life |
| Ratification | Acceptance of terms of contract after reaching age of majority |
| Express Ratification | Takes place when the individual, on reaching age of Majority, states orally or in writing that he or she intends to be bound by the contract. |
| Implied Ratification | Takes place when minor, reaching majority, evidences and intent to abide by the contract. |
| Parental Liability of Minors | Not liable for contracts or torts committed by their minor children |
| Legality of contracts | Contracts must have a legal exchange as its subject matter and must be able to be performed legally. Otherwise the bargain is illegal |
| Legal Assent | Voluntary, willing promise to transact. Acceptance |
| Unilateral Mistake | Mistake made by 1 party |
| Bilateral Mistake | Mistake made by both parties |
| Misrepresentation | Untruthful Assertion of material fact |
| Negligent Misrepresentation | Negligent, untruthful assertion of material fact by contracting party |
| Innocent Misrepresentation | Party making false assertion believes it to be true |
| Fraudulent Misrepresentation | Intentional, untruthful assertion of material fact by contracting party |
| Undue Influence | Persuasive efforts of dominant party, who uses special relationship to unduly persuade the other party |
| Duress | One party threatens other with wrongful act unless assent given |
| Unconscionability | One party has so much bargaining power that he effectively dictates terms of contract, resulting in other party lacks free will |
| Statute of Frauds | Rule of state law requiring certain types of contract to be in writing in order to be enforceable |
| Parole Evidence Rule | oral statements cannot be used to change or contradict the terms of a clearly written contract |
| Obligor | Contractual party who owes duty to other party in privity of contract |
| Obligee | Contractual party owed duty from other party in privity of contract |
| Privity of contract | Relationship between parties to a contract, allowing them to sue each other but preventing a third party to do so |
| Assignment | transfer of rights under a contract to a third party |
| Assignor | Party to contract who transfers his right to a third party |
| Assignee | Party who recieves transfer of rights to a contract |
| Delegation | Transfer of duty under a contract to a third party |
| 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. |
| Promisor | Party who made to promise that benefits third party |
| Promisee | Party who owes something to promisor in exchange for promise |
| Creditor Beneficiary | Third party who benefits from contract in which promissor agrees to pay promisee's debt |
| Donee Beneficiary | Third party who benefits from contract in which promisor agrees to give a gift to third party |
| Vesting | Maturing of rights, such that a party can legally acts on the rights |
| Incidental Beneficiary | A third-party beneficiary who has not contractual rights but benefits from a contract even though that is not the intent of the parties to the contract. Cannot sue |
| Discharge by Material breach | Party unjustifiably fails to substantially perform his contractual obligations |
| Anticipatory Repudiation | Party decides, before actual time of performance, not to complete contract obligations. Anticipatory breach |
| Mutual Recission | Both parties agree to discharge each other from their mutual obligations |
| Substituted Contract | Parties agree to substitute new contract in place of original |
| Accord and satisfaction | Used when one party wishes to substitute a different performance to his original contractual duty |
| Compensatory Damages | Designed to put plantiff in position he would have been in had contract been performed |
| Consequential Damages | Forseeable damages outside the actual contract, result from the breach. Breaching party must have known of the special circumstances. |
| Punitive Damages | Designed to punish defendant and deter him and others from engaging in similar behavior in the future |
| Nominal Damages | Small award intended to signify that plantiff wronged by defendant |
| Liquidated Damages | Damages for breach of contract specified in contract itself |
| Duty to mitigate damages | Obligation on non-breaching party (plaintiff) to use reasonable efforts to minimize damage resulting from defendant's breach of contract. |
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