Ch 5/6/7 - Contracts I Flashcards
contract
an agreement between two parties that is enforceable in a court of law
objective standard test
test based on how a “reasonable person” would view the matter
equal bargaining power
the legal assumption that parties to a contract are able to look out for their own interests
offer
promise to perform specified acts on certain terms
invitation to treat
an expression of willingness to do business
standard form contract
a “take it” or “leave it” contract, where the customer agrees to a standard set of terms that favors the other side
offeror
the person who makes an offer
offeree
the person to whom an offer is made
revocation
the withdrawal of an offer
option agreement
an agreement where, in exchange for payment, an offeror is obligated to keep an offer open for a specified time
lapse
the expiration of an offer after a specified or reasonable period
rejection
the refusal to accept an offer
counteroffer
the rejection of one offer an proposal of a new one
acceptance
an unqualified willingness to enter into a contract on the terms in the offer
consideration
price paid for a promise
gratuitous promise
promise for which no consideration is given
pre-existing legal duty
legal obligation that a person already owes
promissory estoppel
doctrine whereby someone who relies on a gratuitous promise may be able to enforce it
rebuttable presumption
legal presumption in favor of one party that the other side can seek to rebut or dislodge by leading evidence to the contrary
express term
provision of a contract that states a promise explicitly
rules of construction
guiding principles for interpreting or constructing the terms of a contract
implied term
provision that is not expressly included in a contract but that is necessary to give effect to the parties’ intention
entire contract clause
term in a contract in which the parties agree that their contract is complete as written
contractual quantum meruit
awarding one party a reasonable sum for the goods or services provided under a contract
parol evidence rule
rule that limits the evidence a party can introduce concerning the contents of the contract
condition subsequent
an event or circumstance that, when it occurs, brings an existing contract to an end
condition precedent
an event or circumstance that, until it occurs, suspends the parties’ obligations to perform their contractual obligations
limitation of liability clause
term of a contract that limits liability for breach to something less than would otherwise be recoverable
exemption clause
term of a contract that identifies events causing loss for which there is no liability
liquidated damages clause
term of a contract that specifies how much one party must pay to the event of breach
