Chapter 9: Basic Contract Law Flashcards
addendum
A rider to a contract with additional terms or conditions
amendment
A change to contractual terms or conditions
assignment
The transfer to another party in writing of rights or interest in a bond, a mortgage, a lease, or another instrument
auction
A form of selling property where oral bids are taken and the property is sold to the highest bidder
bilateral contract
All parties in a contract are legally bound to act as prescribed
breach of contract
The violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due.
compensatory damages
Money damages awarded to the injured party to compensate them for the breach of contract but not to punish the breaching party.
consequential damages
Award of special damages if the breaching party entered the contract with plans to breach; injured party may sue for lost profits
consideration
(1) That received by the grantor in exchange for a deed.
(2) Something of value that induces a person to enter into a legally enforceable contract
contract
A legally enforceable promise or set of promises between legally competent parties that must be performed for consideration. If a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
counteroffer
A new offer made in response to the offer received. It has the effect of rejecting the original offer
earnest money deposit
Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
executed contract
A contract in which all parties have fulfilled their promises in the contract
executory contract
A contract under which something remains to be done by one or more of the parties.
express contract
An oral or written contract in which the parties state the contract’s terms and express their intentions in words.