Chapter 6 Flashcards
Acceptance
An agreement by one party to the terms of the offer made by another
Bilateral contract
A contract in which there is an exchange of promises, both parties assume an obligation
Capacity
An element of a valid contract, parties to a contract must be legally capable of understanding and entering into the agreement
Contract
A voluntary exchange of promises creating obligations that, if defaulted on, can be enforced and remedied in the courts
Consensus
An element of a valid contract, both parties must objectively know and agree to its terms through an offer and acceptance
Consideration
An element of a valid contract, the price one is willing to pay for the promise set out in the offer
Counteroffer
A new offer the proposal of which rejects and terminates the offer available until then
E-commerce
Commercial activity using electronic communication
Express contract
A contract in which the parties have expressly stated their agreement, either verbally or in writing
Formal contract
An agreement under seal
Freedom of contract
The parties to a contract are generally not restricted as to the terms of their contractual agreement
Gratuitous promise
A one sided agreement that the courts will not enforce
Illegal consideration
A promise to commit an unlawful act or to do something against public policy which is not valid consideration and will not be enforced by a court
Illegal contract
A contract that is void because it involves the performance of an unlawful act
Implied contract
An agreement inferred from the conduct of the parties
Invitation to treat
An invitation to engage in the bargaining process
Legality
An element of a valid contract; the object and consideration of the contract must be legal and not against public policy
Mental incompetence
When a person cannot understand the nature or consequences of their acts
Offer
A tentative promise to do something if another party consents to do what the first party requests
Parol contract
A contract that may be verbal or written but is not under seal; called a simple contract
Past consideration
Something completed before an agreement is made; it is not valid consideration
Postbox rule
A principle that a mailed acceptance is effective when and where it is dropped into a mailbox
Quantum meruit
A reasonable price paid for requested services
Quasi-contract
A contractual relationship involving a request for goods and services where there is no agreement on price before the service is performed; courts impose an obligation to pay a reasonable price in these situations
Revocation
Withdrawal of an offer before acceptance (must be communicated to the offeree)
Simple contract
A written or verbal contract not under seal; also called parol contract
Standard form contract
A contract with fixed terms prepared by a business
Unenforceable contract
An otherwise binding contract that the courts will not enforce, such as a contract that does not satisfy the Statute of Frauds
Unilateral contract
A contract formed when one party performs what has been requested by the other party; there is a promise followed by an act, but not an exchange of promises
Valid contract
An agreement that is legally binding on both parties
Void contract
An agreement that is not legally binding because an essential element is missing
Voidable contract
An agreement that has legal effect but that one of the parties has the option to end
