22 terms

Business Law Four

contractual capacity
the threshold mental capacity required by the law for a party who enters into a contract to be bound by that contract
age of majority
the age at which an individual is considered legally capable of conducting himself or herself responsibly. a person of this age is entitled to the full rights of citizenship, including the right to vote in elections. in contract law, one who is no longer an infant and can no longer disaffirm a contract
in regards 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 himself is _____
the legal avoidance, or setting aside, of a contractual obligation
necessities required for life; may include whatever is believed to be necessary to maintain a person's standard of living or financial and social status
the act of accepting and giving legal force to an obligation that previously was not enforceable
charging an illegal rate of interest
blue laws
state or local laws that prohibit the performance of certain types of commercial activities on Sunday
covenant not to compete
a contractual promise to refrain from competing with another party for a certain period of time (not excessive in duration) and within a reasonable geographic area
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
adhesion contract
a "standard-form" contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms
exculpatory clauses
a clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault
in pari delicto
at equal fault
material fact
a fact important to the subject matter of the contract
guilty knowledge
innocent misrepresentation
a false statement of fact or an act made in good faith that deceives and causes harm or injury to another
negligent misrepresentation
any manifestation through words or conduct that amounts to an untrue statement of fact made in circumstances in which a reasonable and prudent person would not have done (or failed to do) that which led to the misrepresentation.
statute of frauds
a state statute under which certain types of contracts must be in writing to be enforceable
prenuptial agreement
an agreement made before marriage that defines each partner's owership rights in the other partner's property; must be in writing
parol evidence rule
a substantive rule of contracts under which a court will not receive into evidence the parties' prior negotiations, prior agreements, or contemporaneous oral agreements if that evidence contradicts or varies the terms of the parties' written contract
integrated contract
a written contract that constitutes the final expression of the parties' agreement; evidence extraneous to the contract that contradicts or alters the meaning of the contract in any way is inadmissible
collateral promise
a secondary promise that is subsidiary to a principal transaction or primary contractual relationship, such as a promise made by one person to pay the debts of another if the latter fails to perform; normally must be in writing to be enforceable