Indiana University Commercial Law: Contract Elements, Types, and Legal Standards

What are the three elements needed to form a contract?

Offer, acceptance, and consideration.

Why is 'capacity' important in contract law?

Capacity ensures that parties can understand and agree to the terms of the contract.

What is the difference between a voidable contract and a void contract?

A voidable contract can be enforced at the option of one party, while a void contract is not legally enforceable at all.

What distinguishes a unilateral contract from a bilateral contract?

In a unilateral contract, only one party makes a binding promise, whereas in a bilateral contract, both parties make binding promises.

Define a contract.

An agreement, a legally enforceable promise between parties.

Who is the offeror in a contract?

The party that makes a valid offer to contract.

Who is the offeree in a contract?

The party that accepts a valid offer from the offeror.

What must an offer be in order to be valid?

Intentional, definite, and communicated.

What is the 'Mirror Image Rule'?

The acceptance must match the terms of the offer exactly.

What are the forms of consideration in a contract?

Money, goods, services, promises, or intangible benefits.

What is required for a contract to be legal?

The basis of the contract must not involve illegal activities or terms prohibited by law.

What does 'capacity' refer to in contract law?

The mental capability of the parties to understand and agree to the contract terms.

What is an express contract?

A contract where terms are directly stated between the parties.

What is an implied contract?

A contract where the actions of the parties indicate that a contract was intended.

What is the difference between a written and an oral contract?

A written contract is documented, while an oral contract is spoken and may not require written form unless specified by law.

What is a voidable contract example?

A contract with a minor, who can enforce the agreement but has the right to void it.

What is the Uniform Commercial Code (UCC)?

A statute adopted by all states that governs contracts for the sale of goods.

What does 'unconscionable contract' mean?

A contract that is so unfair and one-sided that a court may choose to strike it.

What types of contracts are considered common contracts?

Everyday purchases, home purchases, bank loans, utility services, insurance, and more.