Overview and Formation of Contracts

Flashcards covering key vocabulary and concepts related to the legal environment of business contracts.

Contract

A promise or a set of promises for which the law gives a remedy if breached, or recognizes as a duty.

Mutual Assent

The agreement between parties, typically manifested through an offer and acceptance.

Consideration

Something of value exchanged between parties that is necessary for a contract to be valid.

Capacity

The legal ability of parties to enter into a contract.

Legality

The requirement that the contract's subject matter must be lawful.

Bilateral Contract

A contract involving two promises and two performances.

Unilateral Contract

A contract where one promise is made followed by a performance that triggers a second promise.

Written Contract

A contract that is recorded in writing and usually signed by the parties involved.

Oral Contract

A contract that is agreed upon verbally without written documentation.

Statute of Frauds

A legal doctrine that requires certain contracts to be in writing to be enforceable.

Uniform Commercial Code (UCC)

A comprehensive set of laws governing commercial transactions in the U.S., including sales of goods.

Hybrid Contract

A contract that involves terms for both goods and services.

Void Contract

A contract that lacks enforceability due to missing elements.

Voidable Contract

A contract that may be legally enforced but one party has the right to cancel.

Enforceable Contract

A valid contract that can be enforced in a court of law.

Quasi-Contract

An obligation imposed by law to prevent unjust enrichment by one party at the expense of another.

Express Contract

A contract explicitly stated, either orally or in writing, where the terms are clear.

Implied Contract

A contract formed by the actions or conduct of the parties involved.

Offer

A proposal to enter into a contract, indicating willingness to be bound by specified terms.

Acceptance

The offeree’s agreement to the terms of the offer, creating a binding contract.

Legal Requirements of a Contract

Four essential elements: mutual assent, consideration, capacity, and legality.

Termination of Acceptance

Events that end the offeree's power to accept an offer, either by action of the parties or operation of law.

Intoxication and Contracts

When a party is unable to understand or fulfill contractual obligations due to intoxication.

Digital Contract

A contract formed electronically and governed by the Uniform Electronic Transactions Act.

Objective Theory of Contracts

A standard for interpreting contracts based on the understanding of a reasonable person.

Advertisements as Offers

Generally, advertisements invite buyers to make offers; exceptions exist if specificity exists.

Modification Requirements

Requirements related to changing the terms of a valid contract.

Court Cases Importance

Landmark cases help define legal principles and provide precedent in contract law.

Express Conditions

Specific conditions in a contract that must be satisfied for obligations to be enforced.

Implied Conditions

Conditions not specifically stated but assumed to exist within contracts.

Performance of Contract

The act of fulfilling the obligations outlined in a contract.

Specific Performance

A legal remedy requiring a party to perform their contractual duties.

Liquidated Damages

Pre-determined damages agreed upon in the event of a breach of contract.

Contractual Duty

An obligation a party has to perform under the terms of a contract.

Legally Enforceable

When a contract can be enforced by law and result in legal consequences.

Invitation to Negotiate

A statement or action that invites offers but does not constitute a binding offer itself.

Counteroffer

A response to an offer that alters the terms of the original offer.

Revocation of Offer

The withdrawal of an offer by the offeror before it has been accepted.

Power of Acceptance

The legal ability of an offeree to accept an offer and form a binding contract.

Invitation for Offers

An indication that a seller invites buyers to propose a purchase.

Formal Contract

A contract that must conform to certain formalities to be considered valid.

Informal Contract

A contract that is not formalized through specific legal procedures or documentation.

Mindfulness in Contracting

The importance of parties understanding their obligations and intent before entering contracts.

Contract Breach

Failure to fulfill the promises or conditions outlined in a contract.

Appeal in Contract Cases

A legal process where a party seeks to overturn a decision made in a contract dispute.

Remedy for Breach of Contract

Legal means to enforce a right or redress a wrong in cases of contract violations.

Legal Duty

The obligation under the law to fulfill the terms of a contract.

Expectation Damages

Compensation awarded to a party based on the expected benefits of the contract.

Contractual Liability

The legal responsibility of a party to fulfill contract terms and conditions.