Ch. 9 Flashcards
Promisor
A person who makes a promise
Promisee
A person to whom a promise is made
Contract law it is designed to provide
Stability and predictability for both buyers and sellers in the market place
Contract
A set of promises constituting an agreement between parties, giving each a legal duty to the other and also the right to seek a remedy for the breach of the promises or duties
Objective theory of contracts
The view that contracting parties shall only be bound by terms that can objectively be inferred from promises made
Objective facts include
- What the party said when entering into the contract
- How the party acted or appeared
- The circumstances surrounding the transaction
Freedom of contract
A freedom protected in article 1, section 10 of the US Constitution, the law recognizes everyone’s ability to enter freely into contractual agreements
Offeror
A person who makes an offer
Offeree
A person to whom an offer is made
Bilateral contract
The type of contract that arises when a promise is given in exchange for a return promise. “Promise for a promise”
Unilateral contract
A contract that results when an offer can be accepted only by the offeree’s performance. “Promise for an act”
Formal contract
An agreement that by law requires a specific form for its validity
Informal contract
Contract that does not require a specific form or method of creation to be valid. Also known as simple contract
Example of formal contracts
Checks, drafts, promissory notes and certificates of deposit
Express contract
A contract in which the terms of the agreement are stated in words, oral or written
