Unit 3 Legal Enviornment

What are the essential elements of a contract?

Mutual assent, consideration, capacity of parties, legality of the object of the contract.

What is a voidable contract?

A contract in which one or both parties have the option to void their contractual obligations.

Who is the offeror in a contract?

The party who makes an offer to enter into a contract.

What is consideration in a contract?

Something of legal value given in exchange for a promise.

What does 'genuineness of assent' mean in contract law?

The requirement that a party's assent to a contract be genuine.

What is an implied-in-fact contract?

A contract in which an agreement between parties has been inferred from their conduct.

What constitutes a legally enforceable contract?

If one party fails to perform as promised, the other party can use the court system to enforce the contract and recover damages.

What are compensatory damages?

An award of money intended to compensate a non-breaching party for the loss of the bargain.

What is the 'Infancy Doctrine'?

Allows minors to cancel most contracts.

What is the purpose of the Securities Exchange Commission (SEC)?

To administer federal securities law.

What is a bilateral contract?

A contract entered into by way of exchange of promises of the parties; a promise for a promise.

What does 'duress' mean in the context of contracts?

A situation in which one party threatens to do wrongful acts unless the other party enters a contract.

What is a liquidated damage clause?

Damages that parties will contractually agree upon that should be paid if the contract is breached.

What is a unilateral contract?

A contract in which the offeror’s offer can be accepted only by the performance of an act by the offeree.

What is an executory contract?

A contract that has not been fully performed by either or both sides.

What is 'scienter' in contract law?

Knowledge that a representation is false or made without sufficient knowledge of the truth.

What does 'objective theory of contracts' imply?

The intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.