Chapter 12 Vocabulary

Question 1

That value given in return for a promise or performance in a contractual agreement.

Answer 1

Consideration

Question 2

The act of refraining from an action that one has legal right to undertake.

Answer 2

Forbearance

Question 3

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

Answer 3

Rescission

Question 4

An act that takes place before a contract is made and that ordinarily, by itself, cannot later be consideration with respect to that contract.

Answer 4

Past Consideration

Question 5

A common means of settling a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owed.

Answer 5

Accord and Satisfaction

Question 6

A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.

Answer 6

Liquidated Debt

Question 7

A debt that is uncertain in amount.

Answer 7

Unliquidated Debt

Question 8

An agreement in which one party gives up the right to pursue a legal claim against another party.

Answer 8

Release

Question 9

An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim.

Answer 9

Covenant Not to Sue

Question 10

A doctrine that can be used to enforce a promise when the promisee has justifiably relied on the promise and when justice will be better served by enforcing the promise.

Answer 10

Promissory Estoppel

Question 11

Barred, impeded, or precluded.

Answer 11

Estopped

Question 12

The capacity required by the law for a party who enters into a contract to be bound by that contract.

Answer 12

Contractual Capacity

Question 13

The age (eighteen in most states) at which a person, formally a minor, is recognized by law as an adult and is legally responsible for his or her actions.

Answer 13

Age of Majority

Question 14

In regard to minors, the act of being freed from parental control.

Answer 14

Emancipation

Question 15

The legal avoidance, or setting aside, of a contractual obligation.

Answer 15

Disaffirmance

Question 16

Necessities required for life, such as food, shelter, clothing, and medical attention.

Answer 16

Necessaries

Question 17

The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.

Answer 17

Ratification

Question 18

Charging an illegal rate of interest.

Answer 18

Usury

Question 19

A contractual promise of one party to refrain from conducting business similar to that of another party for a certain period of time and within a specified geographical area.

Answer 19

Covenant Not to Compete

Question 20

A contract between an employer and an employee in which the terms and conditions of employment are stated.

Answer 20

Employment Contract

Question 21

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Answer 21

Reformation

Question 22

A contract or clause that is void on the basis of public policy because one party was forced to accept terms that are unfairly burdensome and that unfairly benefit the other party.

Answer 22

Unconscionable (Contract or Clause)

Question 23

A standard-form contract in which the stronger party dictates the terms.

Answer 23

Adhesion Contract

Question 24

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

Answer 24

Exculpatory Clause