BUSA Exam #3 Study Guide: Torts and Contracts

Comprehensive vocabulary flashcards covering intentional torts, negligence, tort damages, contract elements, validity, performance, breach remedies, and third-party rights from the BUSA Exam #3 study notes.

Assault

Any word or action intended to make another person fearful of immediate physical harm; a reasonably believable threat.

Battery

The unprivileged, intentional touching of another.

Defamation

Any published or publicly spoken false statement that causes injury to another’s good name, reputation, or character.

False Imprisonment

The intentional confinement or restraint of another person’s activities without justification.

Conversion

The wrongful taking, using, or retaining possession of personal property that belongs to another.

Slander of Quality

The publication of false information about another’s product, alleging that it is not what its seller claims.

Slander of Title

The publication of a statement that falsely denies or casts doubt on another’s legal ownership of property, causing financial loss to that property’s owner.

Trespass to Land

The entry onto, above, or below the surface of land owned by another without the owner's permission or legal authorization.

Trespass to Personal Property (Trespass to Chattels)

The unlawful taking or harming of another’s personal property; interference with another’s right to the exclusive possession of his or her personal property.

Compensatory Damages (Torts)

A money award equivalent to the actual value of injuries or damages sustained by the aggrieved party.

Special Damages

An amount awarded to compensate the plaintiff for quantifiable monetary losses, such as medical expenses, property damage, and lost wages and benefits (now and in the future).

General Damages

An amount awarded to compensate individuals for the nonmonetary aspects of the harm suffered, such as pain and suffering; not available to companies.

Punitive Damages

Money damages that may be awarded to a plaintiff to punish the defendant and deter future similar conduct.

Causation in Fact

An act or omission without ("but for") which an event would not have occurred.

Proximate Cause

Legal cause; exists when the connection between an act and an injury is strong enough to justify imposing liability.

Negligence

The failure to exercise the standard of care that a reasonable person would exercise in similar circumstances.

Malpractice

Negligence on the part of a professional.

Contributory Negligence

A theory in tort law under which a complaining party’s own negligence contributed to or caused his or her injuries.

Comparative Negligence

A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party) on the basis of each person’s proportionate negligence.

Palsgraf v. Long Island Railroad

A case where railroad guards helped a man board a moving train, causing his package of fireworks to fall and explode, injuring Helen Palsgraf; the court held the railroad company was not liable because injury to her was not foreseeable, establishing foreseeability as the test for proximate cause.

Privity of Contract

The relationship that exists between the promisor and the promisee of a contract.

Agreement

A meeting of two or more minds in regard to the terms of the contract, consisting of an offer and an acceptance.

Offer

A promise or commitment to perform or refrain from performing some specified act; requires serious intent, reasonably certain terms, and communication to the offeree.

Acceptance

The offeree’s notification to the offeror that the offeree agrees to be bound by the terms of the offeror’s proposal.

Consideration

Value given in return for a promise or a performance; must be something of legally sufficient value and bargained for.

Contractual Capacity

The legal ability to enter into contracts; the threshold mental capacity required by law for a party who enters into a contract to be bound by that contract.

Valid Contract

A contract that results when the elements necessary for contract formation are present.

Voidable Contract

A contract that may be legally avoided at the option of one of the parties, with options for avoidance or ratification.

Void Contract

A contract having no legal force or binding effect.

Objective Theory of Contracts

A theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a promise; formed at the moment the promises are exchanged.

Unilateral Contract

A contract that results when an offer can be accepted only by the offeree’s performance; formed at the moment when the contract is performed.

Forbearance

The act of refraining from exercising a legal right, constituting something of legally sufficient value in consideration.

Preexisting Duty

A promise to do what one already has a legal duty to do, which results in a lack of consideration.

Past Consideration

Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain.

Illusory Promises

Promises where a person expresses contract terms with such uncertainty that the terms are not definite, resulting in a lack of consideration.

Complete Performance

When a party performs exactly as agreed under a contract.

Substantial Performance

Performance by a party who in good faith performs substantially all of the terms of a contract without varying greatly from what was promised and creating substantially the same benefits.

Liquidated Damages

An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.

Compensatory Damages (Contracts)

Damages that compensate the non-breaching party for the loss of the bargain, measured by the difference between the promised performance value and actual performance value.

Consequential Damages

Special damages that compensate for a loss that is not direct or immediate.

Prenuptial Agreement

A legally binding contract signed by a couple before marriage that defines how assets, debts, property, and spousal support will be handled if the marriage ends in divorce or death.

Contract Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

Procedural Unconscionability

Grounds for unconscionability that occur when a party’s lack of knowledge or understanding of the contract terms deprived him or her of any meaningful choice.

Substantive Unconscionability

Grounds for unconscionability that occur when contracts, or portions of contracts, are oppressive or overly harsh.

Covenant Not to Compete

A contractual promise to refrain from competing with another party for a certain period of time and within a certain geographic area.

Third Party Beneficiary

One for whose benefit a promise is made in a contract but who is not a party to the contract.

Delegation

The transfer of a contractual duty to a third party.

Assignment

The act of transferring to another all or part of one’s rights arising under a contract.

Novation

An agreement by both parties to a contract to substitute a third party for one of the original parties, requiring a previous valid obligation, mutual agreement, discharge of the prior party, and a new valid contract.