Contract Law and the Uniform Commercial Code

Vocabulary practice flashcards covering fundamental elements of contracts, breach types, legal remedies, Sateriale v. R.J. Reynolds Tobacco Company, and the Uniform Commercial Code (UCC).

Enforceable Contract

An agreement that requires four essential elements to be legally binding: mutual consent, consideration, capable parties, and legal subject matter.

Mutual Consent

A required contract element where both parties voluntarily agree to the same terms and communicate their agreement.

Consideration

The exchange of something of value between parties, which can involve money, goods, services, or promises.

Capable Parties

A contract requirement stating that both participating parties must have the legal capacity to enter into a contract.

Legal Subject Matter

A contract requirement specifying that the agreement must involve something lawful and serve a lawful purpose.

Breach of Contract

An occurrence where a party fails to fulfill their contractual obligations.

Material Breach

A serious contract violation that defeats an important purpose of the contract, may excuse the other party's performance, and can result in damages.

Minor Breach

A small contract violation that does not defeat the contract's main purpose, usually does not excuse the other party's performance, and can also result in damages.

Remedy

A solution that the law provides when a contract has been broken.

Damages

Money awarded to compensate an injured party for a breach of contract.

Specific Performance

A legal remedy wherein a court orders a party to fulfill their contractual obligations instead of simply paying money.

Sateriale v. R.J. Reynolds Tobacco Company (2012)

A Ninth Circuit legal case ($697\text{ F.3d }777$) ruling that a customer rewards program can create enforceable contractual obligations, rejecting the defense that certificates were only invitations to make an offer, and referencing internal valuations of approximately $0.15$ per dollar to calculate damages.

Uniform Commercial Code (UCC)

A set of commercial laws that modifies certain common-law contract rules for commercial transactions involving the purchase and sale of movable goods.

Firm Offer

An offer that remains open for a definite period under qualifying Uniform Commercial Code rules.

Invitation to Make an Offer

A request for other parties to submit offers, rather than a binding offer to enter into a contract.