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Ch. 9 Key Terms
Terms in this set (32)
In contract law, the offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal. Although historically the terms of acceptance had to be the mirror image of the terms of the offer, the Uniform Commercial Code provides that even modified terms of the offer in a definite expression of acceptance constitute a contract.
A "standard-form" contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.
A meeting of two or more minds in regard to the terms of a contract; usually broken down into two events—an offer by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made.
The act of transferring to another all or part of one's rights arising under a contract.
A type of contract that arises when a promise is given in exchange for a return promise.
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.
An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.
The threshold mental capacity required by the law for a party who enters into a contract to be bound by that contract.
An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.
covenant not to compete
A contractual promise to refrain from competing with another party for a certain period of time and within a certain geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreements, 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.
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.
A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.
A contract that has been completely performed by both parties.
A contract that has not as yet been fully performed.
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract). Also known as implied-in-fact contract
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.
A third party for whose benefit a contract is formed; an intended beneficiary can sue the promisor if such a contract is breached.
A rule providing that an acceptance of an offer becomes effective on dispatch (on being placed in a mailbox), if mail is, expressly or impliedly, an authorized means of communication of acceptance to the offeror.
mirror image rule
A common law rule that requires, for a valid contractual agreement, that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer.
objective theory of contracts
A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.
A promise or commitment to perform or refrain from performing some specified act in the future.
A contract under which the offeror cannot revoke his or her offer for a stipulated time period and the offeree can accept or reject the offer during this period without fear that the offer will be made to another person. The offeree must give consideration for the option (the irrevocable offer) to be enforceable.
Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain.
A person's assurance that he or she will or will not do something.
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.
A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties, by their conduct, or by court decree.
In contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability.
Statute of Frauds
A state statute under which certain types of contracts must be in writing to be enforceable.
third party beneficiary
One for whose benefit a promise is made in a contract but who is not a party to the contract.
A contract or clause that is void on the basis of public policy because one party, as a result of his or her disproportionate bargaining power, is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party.
A contract that results when an offer can only be accepted by the offeree's performance.
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