Chapter 11: Contract Law

Question 1

bilateral contract

Answer 1

a type of contract that arises when a promise is given in exchange for a promise.

Question 2

contract

Answer 2

an agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future.

Question 3

executed contract

Answer 3

a contract that has been completely performed by both parties.

Question 4

executory contract

Answer 4

a contract that has not yet been fully performed

Question 5

express contract

Answer 5

a contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Question 6

extrinsic evidence

Answer 6

evidence that relates to a contract but is not contained within the document itself, including the testimony of the parties, the testimony of the witnesses, and additional agreements and communications. A court may consider extrinsic evidence only when a contract term is ambiguous and the evidence does not contradict the express terms of the contract.

Question 7

formal contracts

Answer 7

a contract that by law requires a specific form, such as being executed under seal, to be valid.

Question 8

implied contracts

Answer 8

a contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)

Question 9

informal contracts

Answer 9

a contract that does not require a specified form or formality in order to be valid

Question 10

objective theory of contracts

Answer 10

a theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions. Objective facts might include what a party said when entering into the contract, how a party acted or appeared, and the circumstances surrounding the transaction.

Question 11

offeree

Answer 11

a person to whom an offer is made

Question 12

offeror

Answer 12

a person who makes an offer

Question 13

promise

Answer 13

a person’s assurance that he or she will or will not do something

Question 14

promisee

Answer 14

a person to whom a promise is made

Question 15

promisor

Answer 15

a person who makes a promise

Question 16

quasi contracts

Answer 16

a fictional contract imposed on parties by a court in the interest of fairness and justice; usually, quasi contracts are imposed to avoid the unjust enrichment of one party at the expense of another.

Question 17

unenforceable contract

Answer 17

a valid contract rendered unenforceable by some statute or law

Question 18

unilateral contract

Answer 18

a contract that results when an offer can be accepted only by the offeree’s performance.

Question 19

valid contract

Answer 19

a contract that results when the elements necessary for contract formation (agreement, consideration, contractual capacity, and legality) are present.

Question 20

void contract

Answer 20

a contract having no legal force or binding effect

Question 21

voidable contract

Answer 21

a contract that may be legally avoided (canceled) at the option of one of the parties.