Legal Studies Module 2

Acceptance

Agreement to be bound by the terms of an offeror's proposal

Accord And Satisfaction

An agreement (accord) and the completion of that agreement (Satisfaction) between two parties as an alternative to a previous agreement

Agreement

In contract law, a meeting of minds about the terms of a contract. Broken down into an offer and acceptance

Bilateral Contract

A type of contract where a promise is given in exchange for a promise.

Browse-Wrap Terms

Terms agreed to by use of a website or program, do not need to be explicitly agreed to

Click-On Agreement

Terms agreed to directly by the user (clicked-on; e.g. an "I agree" button)

Consideration

Value given in return for a promise/performance

Contract

A court enforceable agreement between two or more parties, agreeing to perform (or refrain from) some action in the future

Contractual Capacity

The legal ability to enter into a contract (Non-ex: intoxicated, underage)

Counteroffer

Rejection of the initial offer while making a new offer

Covenant Not To Compete

A promise to refrain from competition with another party for a time in a specific area, legal in most instances and jurisdictions.

Covenant Not To Sue

A contractual agreement to refrain from legal action

Disaffirmance

Legally exiting a contract (ex: a minor remitting)

E-Contracts

Contracts comprised of only electronic signals, not physical

Estopped

Barred, impeded, or precluded

Exculpatory Clause

A clause releasing the contractual party from liability in certain events, regardless of fault

Executed Contract

A contract that has been completely performed by all parties.

Executory Contract

A contract that has not yet been fully performed.

Express Contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Forbearance

The act of refraining from exercising a legal right

Formal Contracts

A contract that by law requires a specific format to be valid (Ex: under a seal)

Implied Contract

A contract formed in some part by the conduct of the parties (as opposed to an express contract)

Informal Contracts

A contract that does not require a specified format to be valid

Liquidated Debt

A debt that is due and certain in amount.

Mailbox Rule

An offer is considered accepted when the acceptance is communicated (Ex: mail)

Mirror Image Rule

Common law rule requiring terms of acceptance exactly match offer

Objective Theory Of Contracts

Contracts are judged based on outward, objective facts as interpreted by a reasonable person. (Not by parties secret intent)

Offer

A promise made to do (or not do) something in exchange for something else

Offeree

A person to whom an offer is made.

Offeror

A person who makes an offer.

Option Contract

A contract which must be available to the offeree - to accept or reject - for a set period of time

Past Consideration

Something given or some act done in the past, which cannot normally be consideration for a later contract

Promise

A person's assurance that they will or will not do something.

Promissory Estoppel

A promise may be considered binding if it led to the detriment of the promisee, regardless of formal consideration

Reformation

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Release

A contract in which one party gives up the right to pursue legal action against the other

Rescission

A remedy where a contract is canceled and parties return to their original positions. May be as a result of mutual consent, conduct (in contract), or court order

Revocation

The withdrawal of an offer. An offer can be revoked anytime before acceptance except in certain contract types

Shrink-Wrap Agreement

An agreement whose terms are packaged with the goods; sometimes called a shrinkwrap license.

Statute Of Frauds

The requirement of certain contracts to be in writing, in some jurisdictions

Unconscionable

A term describing a voided contract because one party is being taken advantage of

Unenforceable Contract

A valid contract rendered unenforceable by some statute or law

Unilateral Contract

A contract where the offer can only be accepted by the offeree's performance

Unliquidated Debt

A debt that is uncertain in amount

Usury

Charging an illegal rate of interest.

Valid Contract

A contract that fulfills all the required elements

Void Contract

A contract having no legal force or binding effect.

Voidable Contract

A contract that may be legally avoided (canceled) at the option of one of the parties.

Anticipatory Repudiation

An assertion or action by a party indicating that they will not fulfill a contractual agreement

Bilateral Mistake

When both parties to a contract are mistaken about the same fact

Breach Of Contract

Failure to perform the obligations of a contract without legal excuse

Commercial Impracticability

The excuse from contract performance for a seller when a contractual contingency makes performance impracticable. Contingency must have been assumed not to happen

Condition

A possible future event, the occurrence or nonoccurrence of which will trigger the performance of (or terminate) a legal obligation under a contract.

Condition Precedent

A condition that must be met before a party's contractual obligation becomes absolute

Consequential Damages

Special damages for indirect or delayed losses; must have been reasonably foreseeable at the time of the breach of contract

Discharge

The termination of an obligation (Ex: completion of contract)

Discharge In Bankruptcy

The release of a debtor from provable debts (some debts cannot be discharged by law)

Duress

Undue pressure to perform (or not perform) actions against one's will

Frustration Of Purpose

A party to a contract can be relieved of duty to perform if the purpose of performance no longer exists (due to reasons beyond that party's control)

Impossibility Of Performance

A party to a contract can be relieved of duty to perform because performance is impracticable

Incidental Damages

Damages compensating expenses incurred as a result of a breach of contract

Liquidated Damages

Damages stipulated in contract and agreed upon to compensate a breach of contract

Mutual Rescission

A mutual agreement to cancel a contract. Attempts to restore parties to initial positions

Nominal Damages

A small monetary award granted to a plaintiff when no actual damage can be proven

Novation

The substitution of a new contract for an old one, can involve the replacement of a party

Penalty

A sum in a contract as punishment for failure to fulfill obligations

Performance

Fulfillment of one's contractual duties

Restitution

A remedy in which a person is restored to their initial position

scienter

Knowledge of the false representation or omission of facts, with the intent to deceive

Specific Performance

A remedy requiring the performance of the contractual obligations. Usually occurs when money is an inadequate remedy

Tender

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so.

Undue Influence

Persuasion that causes a person to act against their will

Unilateral Mistake

When one party to a contract is mistaken about material fact

Voluntary Consent

Knowing and voluntary agreement to a contract

Waiver

An intentional, knowing relinquishment of a legal right.

Conforming Goods

Goods that conform to contract specifications.

Cover

A buyer's (or lessee's) purchase on the open market to substitute for the undelivered goods of the seller (or lessor). Under UCC, buyer (or lessee) can recover price difference as well as damages

Cured

The right of a party under the UCC to correct noncomforming performance during the contract period

Destination Contract

A contract requiring the seller to ship the goods to a particular destination. Seller is liable for goods until received

Express Warranty

A promise as to the quality, description, or performance of goods being sold or leased

Firm Offer

An irrevocable offer without consideration, for a period of time. Must be written and signed for merchants

Identification

The express designation of specific goods provided for in a contract.

Implied Warranty

A warranty derived from the nature of the transaction, the relative situation, or the circumstances of the parties

Implied Warranty Of Fitness For A Particular Purpose

A warranty that goods sold or leased are fit for a particular purpose. Occurs when the seller (or lessor) is aware of the buyer's (or lessee's) particular purpose and reliance of the seller's skills or judgment to select suitable goods

Implied Warranty Of Merchantability

A warranty that goods being sold (or leased) are fit for their ordinary purpose. Automatically arises in sale by merchants who deal in that type of good

Insurable Interest

Stake in goods sold (or leased) that permits a party to insure the goods

Intangible Property

Property that cannot be seen or touched (Ex: Intellectual Property)

Merchant

A person who is engaged in the purchase and sale of goods. Under UCC, a person who deals with sales contracts

Perfect Tender Rule

Common law rule where the seller is required to deliver goods which perfectly fit the requirements of the sales contract. Modified greatly under UCC

Predominant-Factor Test

A court test to determine the primary purpose of a sales contract (goods vs services)

Replevin

An action to recover specific goods wrongfully withheld from a party.

Sale

The passing of title from a seller to a buyer for a price.

Sales Contracts

A contract for the exchange of ownership of goods for money

Seasonably

Within a specified time period. If no period is specified, within a reasonable time.

Shipment Contract

A contract requiring the seller to ship the goods via a carrier. Buyer is liable for goods upon their transfer to the carrier

Tangible Property

Property that can be seen and touched (Ex: car, furniture, etc)

Tender Of Delivery

The act of a seller (or lessor) making the goods available to - and notifying - the buyer (or lessee)