Chapter 16: Elements Of A Contract

Question 1

Valid contract

Answer 1

Contract (agreement enforceable by law) that includes all the essential elements; offer and acceptance, consideration, capacity, consent, legal purpose

Question 2

Contract

Answer 2

Agreement enforceable by law including express and implied contracts, simple contracts or contracts under seal

Question 3

Offer and acceptance

Answer 3

Proposal that expresses the willingness of one party to enter into a contract, followed by an assent by the other party in words or deed; called a “meeting of the minds”

Question 4

Consideration

Answer 4

Sth of value exchanged b/w the parties to a contract; categorized as past, present, or future consideration

Question 5

Capacity

Answer 5

Ability to understand the nature and effect of one’s actions, such as marriage; legal ability to enter a contract on one’s behalf

Question 6

Consent

Answer 6

Agreement given freely and voluntarily, in good faith

Question 7

Lawful purpose

Answer 7

Lawful (not illegal) reason or objective

Question 8

Express contract

Answer 8

Oral or written contract (agreement enforceable by law) in which the terms and conditions are clearly defined and understood by the parties; the opposite of an implied contract

Question 9

Implied contract

Answer 9

Contract that is suggested or understood without being openly and specifically stated; the opposite of an express contract

Question 10

Simple contracts

Answer 10

Contracts that are either express or implied, oral or written, and not under seal

Question 11

Contracts under seal

Answer 11

Written contract in formal language, signed and witnessed, and with a red seal to signify serious intent

Question 12

Offeror

Answer 12

In a contract, the party who makes an offer

Question 13

Offeree

Answer 13

In a contract, the party to whom the offer is made

Question 14

Meeting of the minds

Answer 14

The arriving at a mutual understanding and binding agreement by an offerer and offeree

Question 15

Invitation to treat

Answer 15

Encouragement, through advertising or display of goods, to prospective buyers to make offers

Question 16

Performing

Answer 16

Carrying out, or completing, as in terms of a contract

Question 17

Lapse

Answer 17

The termination, or ending, of an offer because it is not accepted

Question 18

Revocation

Answer 18

In contract law, the cancellation or taking back of an offer by the offeree before it is accepted

Question 19

Counteroffer

Answer 19

A new offer made in response to the original offer that varies or qualifies the original, and so brings the original to an end/nullifies it

Question 20

E-commerce

Answer 20

Business transactions conducted over the internet or electronic systems of communication

Question 21

Negative option marketing

Answer 21

A sales approach in which offerees are contractually bound to an offer unless they declare their rejection of it

Question 22

Present consideration

Answer 22

Exchange of something of value b/w the parties to the contract at the time the contract is formed; usually money for goods or services

Question 23

Future consideration

Answer 23

The promise of a future exchange of something of value b/w the parties to a contract

Question 24

Past consideration

Answer 24

Promise to pay a person for services already performed; not legally binding

Question 25

Necessaries

Answer 25

Goods and services needed to ensure a person's health and welfare (clothes, food, shelter); as opposed to non-necessaries

Question 26

Station in life

Answer 26

One's social standing or rank in society

Question 27

Void

Answer 27

Without legal force; invalid, as in a marriage or other contract

Question 28

Voidable contract

Answer 28

Contract that may be valid or void at the option of one or both parties

Question 29

Non-necessaries

Answer 29

Goods and services that are not required for one's health and welfare

Question 30

Caveat Emptor

Answer 30

Latin phrase meaning "let the buyer beware"; a principal in contract law

Question 31

Misrepresentation

Answer 31

An untrue statement, or one that gives a false impression, about specific goods or services; can be innocent or fraudulent misrepresentation

Question 32

Material fact

Answer 32

A truth (fact) that persuades a buyer to enter into a contract

Question 33

Innocent misrepresentation

Answer 33

An untrue statement, or one that gives a false impression about specific goods or services made thinking the statement was true

Question 34

Rescission

Answer 34

Cancellation or revocation of a contract

Question 35

Fraudulent misrepresentation

Answer 35

Untrue statement or one that gives a false impression about specific goods or services that is made knowingly and with the intent of deceiving

Question 36

Unilateral mistake

Answer 36

An error made by one party and recognized, but not corrected, by the other party; a one-sided mistake

Question 37

Clerical mistake

Answer 37

An error caused by a clerk or other employee, typically involving numbers; an example of a unilateral mistake

Question 38

Non est factum

Answer 38

Latin phrase meaning "It is not my deed"; a denial by one party that a contract was properly executed, based on the claim that he/she was ignorant of its nature

Question 39

Undue influence

Answer 39

Improper pressure applied by one person to another in order to benefit from the result (ex. a will)

Question 40

Duress

Answer 40

Illegal coercion; the threat or use of violence to force a person to do something against his/her will

Question 41

Public policy

Answer 41

Guiding principle for the community as in the requirement that contracts not go against public policy, the public good (ex. a contract that is racist)

Question 42

Restraint of trade

Answer 42

The limitation of competition in business, which can make a contract void if unreasonable or against public policy

Question 43

Restraint of employment

Answer 43

Limitation of a worker's employment (ex. software creator can't work for two companies at the same time or for two years after); can make a contract void if the restraint is unreasonable

Question 44

Common mistake

Answer 44

Error made by both parties and concerning a fundamental fact of a contract