Ch 8/9 - Contracts II

Question 1

voidable contract

Answer 1

a contract that, in certain circumstances, an aggrieved party can choose to keep in force or bring to an end

Question 2

void contract

Answer 2

a contract involving a defect so substantial that it is of no force or effect

Question 3

legal capacity

Answer 3

ability to make binding contracts

Question 4

age of majority

Answer 4

the age of which a person becomes an adult for legal purposes

Question 5

undue influence

Answer 5

unfair manipulation that compromises someone’s free will

Question 6

unconscionable contract

Answer 6

an unfair contract formed when one party takes advantage of the weakness of another

Question 7

misrepresentation

Answer 7

false statement of fact that causes someone to enter a contract

Question 8

rescission

Answer 8

remedy that results in the parties being returned to their pre-contractual positions

Question 9

mistake

Answer 9

an error made by one or both parties that seriously undermines a contract

Question 10

common mistake

Answer 10

both parties tot he agreement share the same fundamental mistake

Question 11

illegal contract

Answer 11

contract that cannot be enforced because it is contrary to legislation or public policy

Question 12

public policy

Answer 12

community’s common sense and common conscience

Question 13

non-solicitation clause

Answer 13

a clause forbidding contract with the business’ customers

Question 14

non-competition clause

Answer 14

a clause forbidding competition for a certain period of time

Question 15

guarantee

Answer 15

promise to pay the debt of someone else, should that person default on the obligation

Question 16

vicarious performance

Answer 16

performance of contractual obligations through others

Question 17

novation

Answer 17

the substitution of parties in a contract or the replacement of one contract with another

Question 18

assignment

Answer 18

the transfer of a right by an assignor to an assignee

Question 19

frustration

Answer 19

termination of a contract by an unexpected event or change that makes performance functionally impossible or illegal

Question 20

balance of probabilities

Answer 20

proof that there is a better than 50% chance that the circumstances of the contract are as the plaintiff contends

Question 21

condition

Answer 21

an important term that, if breached, gives the innocent party the right to terminate the contract and claim damages

Question 22

warranty

Answer 22

a minor term that, if breached, gives the innocent party the right to claim damages only

Question 23

innominate term

Answer 23

term that cannot easily be classified as either a condition or a warranty

Question 24

fundamental breach

Answer 24

breach of contract that affects the foundation of the contract

Question 25

anticipatory breach

Answer 25

a breach that occurs before the date for performance

Question 26

damages

Answer 26

monetary compensation for breach of contract or other actionable wrong

Question 27

expectation damages

Answer 27

damages which provide the plaintiff with the monetary equivalent of contractual performance

Question 28

punitive damages

Answer 28

an award tot he plaintiff to punish the defendant for malicious, oppressive, and high-handed conduct

Question 29

duty to mitigate

Answer 29

the obligation to take reasonable steps to minimize the losses resulting from a breach of contract or other wrongs

Question 30

unjust enrichment

Answer 30

occurs when one party has undeservedly or unjustly secured a benefit at the other party’s expense

Question 31

restitutionary quantum meruit

Answer 31

an amount that is reasonable given the benefit the plaintiff has conferred