Chapter 8: Contracts Flashcards
What is a valid contract?
contain 4 essential legal: competent parties, mutual assent, consideration, lawful purpose
What is a void contract?
not a contract. no legal obligation and has no legal force
What is an voidable contract?
contract has all essential elements, but one or more may be removed at the option of the party under a disability
What is a executory contract?
one in which one or both parties have not yet performed
What s a bilateral contract?
both parties make promises and incur obligations
What is a unilateral contract?
only one party is making a promise and is obligated
What is actual fraud?
deliberate and malicious misrepresentation of material facts. intentional
What is negative fraud?
concealment of important information
What is constructive fraud? (negligent misrepresentation)
no intent to deceive or mislead the other party but material facts are still misrepresented
What is novation?
substitution of a new obligation for a old one
What are the 3 ways to resolve a contract in default? (contractual remedies)
mediation, arbitration, liquidated damages
What is arbitration?
a disinterested party hears both sides of the dispute and makes a decision
What is rescission?
cancelling a contract and returning parties back to original positions
How can contract be cancelled by remedied provided by the law?
damages, specific performance, rescission
What are the 4 remedied an injured party to a contract?
liquidated damages or arbitration, court suit for damages, court suit for specific performances, unilateral rescission
