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34 terms

Business Law Three

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contract
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
objective theory of contracts
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
bilateral contract
a type of contract that arises when a promise is given in exchange for a return promise
unilateral contract
a contract that results when an offer can only be accepted by the offeree's performance
promisor
a person who makes a promise
promisee
a person to whom a promise is made
formal contracts
a contract that by law requires a specific form, such as being executed under seal, to be valid
informal contracts
a contract that does not require a specified form or formality to be valid
express contract
a contract in which the terms of the agreement are fully and explicitly stated in words, oral or written
implied-in-fact contract
a contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)
executed contract
a contract that has been completely performed by both parties
executory contract
a contract that has not as yet been fully performed
voidable contract
a contract that may be legally avoided (canceled, or annulled) at the option of one of the parties
valid contract
a contract that results when elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present
unenforceable contract
a valid contract rendered unenforceable by some statute or law
void contract
a contract having no legal force or binding effect
quasi contract
a fictional contract imposed on parties by a court in the interests of fairness and justice; usually they are imposed to avoid the unjust enrichment of one party at the expense of another
quantum meruit
"as much as he deserves"
offer
a promise or commitment to perform or refrain from performing some specified act in the future
revocation
in contract law, the withdrawal of an offer by an offeror.
option contract
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 enforcable
promissory estoppel
a doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiable relies; such a promise is binding if justive will be better served by the enforcement of the promise
estop
to bar, impede, or preclude
counteroffer
an offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer
mirror image rule
a common law rule that requires, for a valid contractual agreement, that the terms of the offeree's accpetance adhere exactly to the terms of the offeree's offer
acceptance
the offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal.
mailbox rule
a rule providing that an acceptance of an offer becomes effective on dispatch, if mail is, expressly or impliedly, an authorized means of communication of acceptance to the offeror
consideration
generally, the value given in return for a promise or performance; it must be present to make the contract legally binding, must be something of legally sufficient value and bargained for
forbearance
the act of refraining from action the one has a legal right to undertake
rescission
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
past consideration
an act done before the contract is made, which ordinarily, by itself, cannot be consideration for a later promise to pay for the act
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 the payment has been accepted or other performance has been made, the ______ is complete and the obligation is discharged
release
a contract in which one party forfeits the right to pursue a legal claim against the other party
covenant not to sue
an agreement to substitute a contractual obligation for some other type of legal action based on a valid claim