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Law > CH 7 - Contracts > Flashcards

CH 7 - Contracts Flashcards

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1
Q

___ is a response by the person receiving the offer that indicates willingness to enter into the agreement proposed in the offer

A

Acceptance

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2
Q

An ___ is formed when the creditor accepts the debtor’s offer to settle the dispute for an amount less than the creditor claims is due

A

Accord

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3
Q

An ___ is an agreement to accept performance that is different from what is called for in the contract.

A

accord and satisfaction

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4
Q

An ___ of a contract occurs when one party knows ahead of time (before performance is due) that the other party will breach the contract

A

anticipatory repudiation

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5
Q

rejection of a proposal or idea.

A

repudiation

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6
Q

A ___ is a promise given in exchange for another promise. One party agrees to do one thing, and the other party agrees to do something in return

A

Bilateral contract

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7
Q

A violation of the terms of a contract

A

Breach of contract

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8
Q

___ (no party is a minor or incompetent person unless that party ratifies contract)

In contracts between an adult and an infant, adults are bound but infants may escape contracts at their option (i.e. the contract is voidable). Infants may ratify a contract on reaching age of majority.

A

Capacity

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9
Q

Damages that compensate for the economic loss caused by the breach of contract are ___

A

Compensatory damages

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10
Q

The party’s duty to perform requires that each party perform for the other at the same time

A

Condition concurrent

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11
Q

An event that must or must not occur before performance is due

A

Condition precedent

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12
Q

The party has a duty to perform until a future event occurs that discharges the party

A

Condition subsequent

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13
Q

in addition to damages that compensate for the breach itself, the plaintiff is entitled to ___ —that is, compensation for losses that occurred as a foreseeable result of the breach

A

consequential damages

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14
Q

Each party must transfer something of legal value to the other

A

Consideration

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15
Q

A ___ is a legally enforceable promise or set of promises. If the promise is broken, the person to whom the promise was made—the promisee—has certain legal rights against the person who made the promise—the promisor

A

contract

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16
Q

An offer made in retort (answer) to another offer

A

Counteroffer

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17
Q

A ___ is an agreement, generally part of an employment contract or a contract to sell a business, in which one party agrees to refrain from competing with the other party for a specific period of time and within a particular area

A

Covenant not to compete

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18
Q

Promises to do or refrain from doing something

A

Covenants

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19
Q

Procure substitute goods or services

A

Cover

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20
Q

If the promisee entered into the contract to discharge a duty he or she owed to the third party, then the third party is a ___ and has the right to enforce the contract between the promisor and promisee

A

Creditor beneficiary

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21
Q

When an offeree has changed his or her position because of justifiable reliance on the offer

A

Detrimental reliance

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22
Q

When the contractual obligations have been satisfied or terminated in other words ___.

A

Discharged

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23
Q

A ___ is created when the promisee does not owe an obligation to the third party, but rather wishes to confer a gift

A

Donee beneficiary

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24
Q

A contract is voidable if one party was forced to enter into it through fear created by threats. Thus, inducing someone to sign a contract by physical threat, blackmail, or extortion is ___

A

Duress

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25
Q

Under the ___, if an agent acts on behalf of another (the principal) in signing an agreement of the type that must, under the statute of frauds, be in writing, the authority of the agent to act on behalf of the principal must also be in writing

A

equal dignities rule

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26
Q

A contract under which the parties have continuing obligations to perform

A

Executory (started and not yet finished) contract

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27
Q

___ give the nonbreaching party the benefit of its bargain, putting the plaintiff in the cash position it would have been in if the contract had been fulfilled.

A

Expectation damages

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28
Q

___ occurs when, because of a misrepresentation, or untrue statement of material fact, one party does not understand that he or she is entering into a contract or does not understand one or more essential terms of the contract

A

Fraud in the factum

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29
Q

___, occurs when a party makes a false statement to persuade the other party to enter into an agreement

A

Fraud in the inducement

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30
Q

___ occurs when performance is possible, but changed circumstances have made the contract useless to one or both of the parties

A

Frustration of purpose

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31
Q

A ___ purports to relieve the owner of the facility of any liability, including liability for negligence that results in injuries to a person using the facility

The user of a facility is sometimes asked to sign a ___, especially before embarking on a dangerous activity, such as skydiving or race car driving.

A

general release = is a document in which one person releases another from any claims or threats of lawsuits

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32
Q

appear to be or do something, especially falsely.

A

purport

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33
Q

Promise that imposes no obligation on the promisor

A

Illusory promise

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34
Q

Every contract contains an___that imposes on each party a duty not to do anything that will deprive the other party of the benefits of the agreement

A

Implied covenant of good faith and fair dealing

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35
Q

If for some unforeseen unpredictable reason, a contract is not possible to perform then there would be no entitlement to financial compensation for the hurt party. However, must fit extreme rules for what is impossible

A

Impossibility

36
Q

Closely related to impossibility is the concept of ___ , where performance is possible but commercially i___. As a rule, ___ is difficult to prove

A

Impracticality

37
Q

In addition to compensatory and consequential damages, a nonbreaching party may incur lesser, relatively minor damages known as ___

A

Incidental damages

38
Q

A court order forcing the promisor to perform the promise.

A

Injunction

39
Q

At some point in the negotiations, the parties will usually manifest an intention, either orally or in writing, to enter into a contract

A

Intent to be bound

40
Q

___ cannot be terminated by the offeror

A

Irrevocable offer

41
Q

The parties to a contract may include a clause that specifies the amount of money to be paid if one of them should later breach the agreement. Such ___ clauses are frequently used in real estate and construction contract

A

Liquidated damages

42
Q

An agreement between two companies to combine into a single entity

A

Merger agreement

43
Q

The traditional concept of contract formation requires that what the offeree accepts must be exactly the same as what the offeror has offered. If it is not, the ___ dictates that no contract has been formed

A

Mirror image rule

44
Q

Untrue statement of material fact

A

Misrepresentation

45
Q

Like a misunderstanding due to ambiguity, a ___ by both parties can make a contract voidable

A

mistake of fact

46
Q

A ___ occurs when the parties make an erroneous assessment about some aspect of what is bargained for

A

mistake of judgment

47
Q

Lessen the amount of damages that flow from a breach

A

Mitigate

48
Q

If both parties agree, they may also terminate the contract by ___ .___ is itself a type of contract and, as such, requires a valid offer, acceptance, and consideration

A

Mutual rescission (the revocation, cancellation, or repeal of a law, order, or agreement.)

49
Q

The corollary of consideration in the case of bilateral contracts is the concept of ___. To be enforceable, a bilateral contract must limit the behavior of both parties in some fashion. If one party has full freedom of action, there is no contract

A

Mutuality of obligation

50
Q

corollary

A

a proposition that follows from (and is often appended to) one already proved

51
Q

One technique is ___, by which a new party is substituted for one of the original parties, and a new contract is written (with the consent of all original and new parties) to effect the desired change

A

Novation

52
Q

An ___ is a manifestation of willingness to enter into a bargain that justifies another person in understanding that his or her assent will conclude the bargain

A

offer

53
Q

Intended recipient

A

Offeree

54
Q

___ arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice for one party to the contract

A

Oppression

55
Q

An ___ is created when an offeror agrees to hold an offer open for a certain amount of time in exchange for some consideration from the other party

A

option contract

56
Q

Agreement to purchase all of a particular producer’s production (exclusive contract)

A

Output contract

57
Q

Under the ___ , when there is an unambiguous written contract that the parties intended would encompass their entire agreement, __ l (that is, oral) __ of prior or contemporaneous statements is inadmissible in court and cannot be used to interpret, vary, or add to the terms of the written contract

A

parol evidence rule

58
Q

___ to authorize a person, called an attorney in-fact (who need not be a lawyer), to sign documents on their behalf

A

Power of attorney

59
Q

Liability imposed on a party for losses caused to the other party during negotiations that fail to ripen into a binding contract

A

Precontractual liability

60
Q

An agreement entered into before marriage that sets forth the manner in which the parties’ assets will be distributed and the support to which each party will be entitled in the event of divorce.

A

Prenuptial agreement

61
Q

A ___ can maintain an action on a promise made to him

A

Promisee

62
Q

The primary exception to the rule that only promises supported by consideration will be enforced is the doctrine of ___. ___l (sometimes referred to as detrimental reliance or unjust enrichment) applies only if the injured party can prove that (1) there was a promise on which the promisee justifiably relied, (2) the reliance was foreseeable, and (3) injustice would result if the court provided no relief to the promisee

A

Promissory estoppel

63
Q

___ occurs when one party makes a promise without any intention of carrying it out. This is a misrepresentation of intent, rather than a misrepresentation of fact

A

Promissory fraud

64
Q

occurs when a salesperson “gives voice to ‘the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.’

A

Puffing

65
Q

A court will order restitution under the doctrine of ___ if one party has received a benefit for which it has not paid the other party, even though there was no contract between the parties.

restitution (the restoration of something lost or stolen to its proper owner.)

A

Quantum meruit is a Latin phrase meaning “what one has earned”. In the context of contract law, it means something along the lines of “reasonable value of services”.

66
Q

To ___ is to (subsequently agree to be bound by) contracts after they reach majority or gain competency

A

Ratify

67
Q

___ compensate the nonbreaching party for any expenditures it made in reliance on the contract

A

Reliance damages

68
Q

Mergers and acquisitions are usually highly negotiated transactions that are governed by detailed acquisition agreements containing ___ . Statements about the entity being sold and the buyer

A

Representations and warranties

69
Q

Occurs when a seller agrees to supply the needs of a buyer (exclusive contract)

A contract under which the buyer agrees to buy all of a specified commodity the buyer needs from the seller and the seller agrees to provide that amount.

A

Requirements contract

70
Q

Whereas reliance damages look at what the plaintiff has lost, ___ looks at what the other party has gained from the transaction. The usual measure of ___ is the amount it would cost the recipient of the benefit to buy that benefit elsewhere.

A

Restitution= the restoration of something lost or stolen to its proper owner.

71
Q

To take back – to cancel

A

Revoke

72
Q

___ is the discharge (To liberate or free) of the debt.

A

Satisfaction

73
Q

According to the ___, the government generally cannot be held liable for breach of contract due to legislative or executive acts

A

Sovereign acts doctrine

74
Q

Instead of awarding monetary damages, a court may order the breaching party to complete the contract as promised, a remedy known as

A

Specific performance

75
Q

Although most oral contracts are enforceable, many states have a statute, called the ___, that requires certain types of contracts to be evidenced by some form of written communication

A

Statute of frauds

76
Q

___ arises when the terms of the contract are hidden in a densely printed form drafted by the party seeking to enforce these terms

A

Surprise

77
Q

A person who is not a party to a contract can sometimes still enforce it, this person would be a third party to the contract.

A

Third party beneficiary

78
Q

A contract term is ___ if it is so oppressive or fundamentally unfair as to “shock the conscience” of the court

A

Unconscionable

79
Q

Under the related doctrine of ___, a court may invalidate an agreement if one party exercised improper persuasion on the other, making genuine assent impossible

A

undue influence

80
Q

the expression of approval or agreement.

A

assent

81
Q

A promise given in exchange for an act

A

Unilateral contract

82
Q

Synonym for Promissory estoppel

A

Unjust enrichment

83
Q

Sometimes a statute will expressly make certain types of contracts illegal. For example, ___ limit the interest rate on loans and usually provide that any loan agreement in violation of the statute is unenforceable

A

Usury statutes

84
Q

Contract has no legal effect, null

A

void

85
Q

Capable of being void, IE if someone is mentally incapable of entering a contract

A

Voidable

Law (8 decks)

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