Contract Law

Question 1

CAPACITY

Answer 1

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

Question 2

CAVEAT EMPTOR

Answer 2

latin phrase “let the buyer beware”; a principle in contract law

Question 3

CLERICAL MISTAKE

Answer 3

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

Question 4

CONSENT

Answer 4

agreement given freely and voluntarily, in good faith

Question 5

CONSIDERATION

Answer 5

something of value exchanged between the parties to a contract; categorized as past, present, or future consideration

Question 6

CONTRACT

Answer 6

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

Question 7

DURESS

Answer 7

illegal coercion; the threat or choice of violence to force a person to do something against his or her will

Question 8

EXPRESS CONTRACT

Answer 8

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

Question 9

FRAUDULENT MISREPRESENTATION

Answer 9

an 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 10

FUTURE CONSIDERATION

Answer 10

the promise of a future exchange of something of value between the parties to a contract (buying credit)

Question 11

IMPLIED CONTRACT

Answer 11

a contract (agreement enforceable by law) that is suggested or understood without being openly and specifically stated; opposite of an express contract

Question 12

INNOCENT MISREPRESENTATION

Answer 12

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

Question 13

INVITATION TO TREAT

Answer 13

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

Question 14

LAPSE

Answer 14

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

Question 15

REVOCATION

Answer 15

the cancellation, or taking back, or an offer by one offeree before is it accepted

Question 16

LAWFUL PURPOSE

Answer 16

a lawful (not illegal) reason or objective

Question 17

MEETING OF THE MINDS

Answer 17

the arriving at a mutual understanding and binding agreement by an offeror and offeree

Question 18

OFFER (AND ACCEPTANCE)

Answer 18

a proposal that expresses the willinness 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 19

OFFEREE

Answer 19

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

Question 20

OFFEROR

Answer 20

in a contract, the party who makes an offer

Question 21

PERFORMING

Answer 21

carrying out, or completing as in the terms of a contract

Question 22

RESTRAINT OF TRADE

Answer 22

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

Question 23

SIMPLE CONTRACTS

Answer 23

contracts (agreement enforceable by law) that are either express or implied, oral or written, and not under seal

Question 24

UNILATERAL MISTAKE

Answer 24

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

Question 25

VOIDABLE CONTRACT

Answer 25

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

Question 26

ELEMENTS OF A CONTRACT

Answer 26

• invitation to treat
• offer
• acceptance
• awareness (meeting of minds)
• consideration
• terms must be substantially completed