Unit 4 Contracts: The Basics - Video Notes (Vocabulary Flashcards)

Vocabulary flashcards covering classifications, elements, and discharge of contracts based on the lecture notes.

Express Contract

A contract in which the terms are stated in words, either orally or in writing.

Implied Contract

An agreement shown by conduct rather than by explicit words.

Bilateral Contract

An agreement where both parties promise to perform the same act.

Unilateral Contract

A contract in which only one party promises to perform; the other is not bound unless performance occurs.

Executory Contract

A contract in which some duties remain to be performed by one or both parties.

Executed Contract

A contract in which all terms have been fully performed.

Void Contract

A contract with no legal effect or enforceability.

Voidable Contract

A valid contract that may be rejected by one party due to circumstances like fraud or duress.

Unenforceable Contract

A valid contract that cannot be legally enforced, often due to a legal defect.

Valid Contract

A legally binding agreement that meets all essential elements.

Legally Competent Parties

Persons who have the legal capacity to enter into a contract (typically 18+, not incapacitated).

Minor

A person under the age of legal capacity; contracts with minors are generally voidable by the minor.

Power of Attorney

A legal document authorizing another person to act on one’s behalf; can be revoked and must be recorded for real property.

Attorney-in-Fact

The person who holds the power of attorney and acts for the principal.

Mutual Consent

A meeting of the minds; an offer and its acceptance.

Offer

A clear expression of contractual intent to enter into a contract, communicated to the offeree.

Acceptance

Unconditional agreement to the terms of an offer; must be communicated and complete.

Counteroffer

A rejection of the original offer and a new offer made by the offeree.

Termination of Offer

Offers may terminate by lapse of time, revocation, failure of a condition, rejection, or death.

Lapse of Time

An offer is revoked if the offeree does not accept within the specified period.

Revocation

Withdrawal of an offer by the offeror before acceptance.

Failure of Condition

An offered condition not being fulfilled can terminate the offer.

Genuine Assent

Actual agreement free from fraud, misrepresentation, duress, or undue influence.

Fraud

Intentional deception to obtain something of value.

Misrepresentation

False statement of fact; may render a contract voidable.

Innocent Misrepresentation

False information provided without knowledge of its falsehood; may permit rescission.

Mistake

A misunderstanding of facts that may affect contract validity if material.

Duress

Threat or use of force to coerce agreement; makes contract voidable.

Undue Influence

Unfair persuasion that could render a contract voidable.

Lawful Objective

The contract’s purpose must be legal; illegal objectives invalidate the contract.

Sufficient Consideration

Something of value given in exchange for a promise or performance.

Forbearance

Forgiving a debt or giving up a right; constitutes valid consideration.

Earnest Money

A deposit showing intent to perform; not the contract’s consideration; may be used as damages.

Parol Evidence Rule

Written terms control; external oral statements generally cannot vary the contract.

Statute of Frauds

Laws requiring certain contracts to be in writing to prevent fraud, especially in real estate.

Contracts That Must Be In Writing

Examples include sale of real property, contracts not performable within a year, and certain debt/payment agreements related to real estate.

Precedence in Modifications (Order of Conflict)

Handwritten changes prevail over typed; typed prevail over attached addenda; addenda prevail over preprinted material.

Discharge of Contracts

Cancellation or termination of a contract by performance, release, assignment, novation, or breach.

Performance

Fully carrying out the contractual duties.

Tender of Performance

Offer by a party to perform; commonly at escrow closing.

Release

A party’s agreement to relieve the other of contractual duties.

Mutual Rescission

All parties agree to cancel the contract.

Assignment

Transfer of rights and benefits from the assignor to the assignee; obligations may remain.

Novation

Substitution of a new contract or party, extinguishing the original obligation.

Breach of Contract

Failure to perform as promised under the contract.

Remedies for Breach

Unilateral rescission, money damages, or specific performance.

Specific Performance

Court-ordered completion of the contract’s terms, often used in real estate.

Money Damages

Financial compensation for losses due to breach.

Statute of Limitations

Time limits for filing lawsuits; varies by action, commonly four years for written contracts.

Assignee

Person to whom rights under a contract are transferred.

Assignor

Person who transfers rights under a contract.

Offeror

The party who makes the offer.

Offeree

The party to whom the offer is made.

Tender

An offer to perform a contractual duty.

Waiver

Relinquishment or refusal to enforce a right.

Option

A unilateral contract where the offeror keeps an offer open for a fee or consideration for a period of time.