Contracts

Contract

A legally binding agreement between two or more parties.

Offer

A proposal by one party to enter into an agreement

Acceptance

Unqualified agreement to the terms of the offer

Consideration

Something of value exchanged to form a binding contract.

Mutual Assent

Both parties agree to the contract terms (aka “meeting of the minds”)

Capacity

Legal ability to enter into a contract (e.g., age, mental competence).

Legality

The contract’s subject must be lawful

Express Contract

Terms are clearly stated (oral or written).

Implied Contract

Formed by actions or conduct.

Bilateral Contract

Both parties make promises.

Unilateral Contract

One party makes a promise in exchange for performance.

Executed Contract

All terms have been fulfilled

Executory Contract

Terms are still pending fulfillment

Performance

Fulfilling contractual obligations

Substantial Performance

Enough fulfillment to warrant payment, even if not perfect.

Breach of Contract

Failure to perform as agreed

Damages

Monetary compensation for breach

Specific Performance

Court order requiring exact fulfillment of contract terms

Rescission

Canceling the contract and restoring parties to original positions

Restitution

Returning benefits received under a voided contract

Duress

Coercion invalidates consent.

Undue Influence

Exploiting a relationship to gain unfair advantage

Fraud

Intentional deception to induce agreement.

Statute of Frauds

Requires certain contracts to be in writing

Promissory Estoppel

Enforces a promise even without consideration if reliance caused harm.

Quasi-Contract

Imposed by law to prevent unjust enrichment.

Assignment

Transfer of rights to another party.

Delegation

Transfer of duties to another party.

Novation

Replacing one party with another, releasing the original party.

Liquidated Damages Clause

Pre-agreed amount for breach.

Force Majeure

Excuses performance due to extraordinary events.

Arbitration Clause

Requires dispute resolution outside of court.