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Legal English Terminology > Contract Law > Flashcards

Contract Law Flashcards

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Proverbs and Idioms flashcards
1
Q

ab initio

A

‘from the beginning’. a contract terminated ab initio returns the parties to the pre-contractual position

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2
Q

acceptance

A

the acceptance of an offer by words or conduct. The acceptance must mirror the offer (mirror image rule)

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3
Q

accord and satisfaction

A

required for an unilateral discharge of the contract.

accord: agreement to discharge a contract
satisfaction: consideration needed

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4
Q

adequate

A

consideration does not have to be adequate, so both parties do not have to give up something equal

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5
Q

affirm

A

an affirmed, or accepted, contract can’t be rescinded if the party that accepted knew of a defect

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6
Q

agreement to agree

A

non-binding intention of the parties. This can be a letter of intent, a memorandum of understanding or a heads of agreement.

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7
Q

anticipatory breach

A

a party makes clear that he will not perform his contractual obligations before the due date

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8
Q

bars to rescission

A

a party can’t always rescind a contract, for instance in the case of

  • affirmation
  • no possibility of restitutio in integrum
  • third party rights have intervened
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9
Q

battle of the forms

A

the situation in which it is unclear whose standard contract applies (the offer or the acception)

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10
Q

bilateral discharge

A

both parties have not performed their contractual obligations, so they discharge by agreement to not enforce the original contract

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11
Q

binding

A

a binding contract is legally enforceable

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12
Q

breach of contract

A

the refusal or failure by a party to perform a contractual obligation. Damages are available for any breach, but in the case of a very serious breach the innocent party can also end the contract

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13
Q

business efficacy rule

A

a court may imply a term in, if the agreement was clearly intended to create a legal relationship and the contract cannot function without an implied term

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14
Q

capacity

A

the ability of a natural/legal person to enter into a contract

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15
Q

caveat emptor

A

let the buyer beware

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16
Q

collateral contract

A

one party enters into the main contract on the basis of a promise made by the other party

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17
Q

collective agreements

A

agreement between trade unions and employers, has to be incorporated into the individual employment contract

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18
Q

common mistake

A

both parties mistakenly believe the samen think and this mistaken assumption is based on a reasonable ground

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19
Q

condition

A

a fundamental term of the contract. If it is breached, a party can claim damages as well as treat the contract as ended

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20
Q

condition precedent

A

a condition stating that a right will not be granted until some future event

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21
Q

condition subsequent

A

a condition stating that the contract can be modified or set aside if some event occurs later

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22
Q

consensus ad idem

A

the need of a meeting of minds in order for there to be contractual agreement

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23
Q

consequential loss

A

unusual or special loss that would not necessarily be caused by the breach

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24
Q

consideration

A

the bargain. Each party gives something up (acts or promises).

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25
Q

construction

A

the court interprets the meaning of words

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26
Q

contract

A

a legally enforceable agreement

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27
Q

contracts in restraint of trade

A

contracts preventing the free exercise of trade or business. These are void unless it can be shown that the provision is reasonable between the parties (anti-competition clause in employment contract) and is not against the public interest

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28
Q

contract of adhesion

A

standard form contract on a ‘take it or leave it’ basis offered by a party in a superior position. the other party cannot negotiate the terms

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29
Q

contra proferentem rule

A

an exclusion clause is interpreted strictly, so if there is any confusion, it comes for the risk of the party who relies on the clause

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30
Q

counter offer

A

not all the terms of an offer are accepted, so there is no acceptance but a counter offer

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31
Q

damages

A

financial compensation that put the claimant in the position he would have been in were the contract performed properly

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32
Q

deed

A

a written document signed by parties and witnesses

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33
Q

digital content

A

data produced and supplied in digital form, such as online films or games

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34
Q

discharge

A

release from the obligations under a contract. It may be by performance, agreement, breach or frustration

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35
Q

discharge by agreement

A

both parties agree to end the contract

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36
Q

discharge by breach

A
  • when the party in default has repudiated the contract either before performance is due or before it has been fully performed
  • when there is a fundamental breach
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37
Q

discharge by frustration

A

it becomes impossible/futile to carry out the contract due to circumstances that are not the fault of either party

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38
Q

discharge by performance

A

the obligations have been carried out

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39
Q

distance selling

A

selling and buying of goods via the internet, mail order, phone or tv

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40
Q

divisible contract

A

the contract can be divided into a number of specific parts

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41
Q

doctrine of impossibility

A

US term for doctrine of frustration

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42
Q

duress

A

violence or threats in order to make someone enter into a contract. This can also be economic duress: illegitimate pressure going beyond acceptable commercial practice. Thus, there cannot be a voluntary acceptance of an offer

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43
Q

entire contract

A

contract that is not divisible into sets of obligations

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44
Q

exceptio non adimpleti contractus

A

Civil law, not common law! This means one of the parties can suspend his own performance if the other party does not fulfill the agreed obligation (opschortingsrecht)

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45
Q

exclude

A

to rule out liability for contractual failure

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46
Q

exclusion/exemption/limitation clause

A

a term that excludes or limits liability for a breach of contract, misrepresentation or negligence

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47
Q

executed consideration

A

one party performs an act in fulfilment of a promise made by the other, as in a unilateral contract

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48
Q

executory consideration

A

an exchange of promises to perform acts in the future

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49
Q

expectation damages

A

damages the innocent party can claim in a breach of contract action, where the profit the innocent party could have made if there was no breach, is taken into account

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50
Q

ex post facto warranty

A

if the innocent party chooses to continue the contract even after the breach of a condition, the condition is treated as a warranty. Only damages may be claimed in this case

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51
Q

express terms

A

terms explicitly stated by the parties, oral or written

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52
Q

firm offer

A

the offer is unequivocal, but can be withdrawn anytime before acceptance. This can even be done if there was a promise to keep the offer open. That promise would only be binding if there is a separate contract where value for the promise would have been given (option contract)

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53
Q

force majeure

A

a list of events considered outside the control of parties, such as natural disasters, for which the parties cannot be in breach

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54
Q

fraudulent misrepresentation

A

the person knew that the statement was untrue, or was reckless about the truth

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55
Q

frustrating event

A

an event beyond the control of the parties that makes the contract impossible or commercially pointless to carry out

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56
Q

frustration of the common venture

A

a contract can be discharged by frustration if there is no physical destruction of the subject matter, but the essential commercial purpose of the contract no longer exists

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57
Q

fundamental term

A

a term is fundamental if it goes to the root of the contract

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58
Q

guarantee

A

also called warranty. This is a legally enforceable promise that the goods are of good quality and will work properly

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59
Q

honour clause

A

this clause makes clear that there is no intention to create legal relations

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60
Q

illegality

A

when a contract is illegal, it is void

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61
Q

implied terms

A

terms that can be read into the contract, either by custom, by statute or by the courts

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62
Q

incorporation

A

an exemption clause must be incorporated into the contract, either by including it in a signed document or by giving notice of it in case there is no written contract

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63
Q

indemnify

A

to reimburse someone for the damage that he has suffered, a statement of liability to pay compensation

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64
Q

indemnity

A

an order of rescission may be accompanied by the court ordering an indemnity. This is not the same as damages; it is simply to put the parties back into their pre-contractual situation

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65
Q

induce

A

to encourage or persuade someone (to enter into a contract)

66
Q

inequality of bargaining power

A

one party to a contract may have a dominant position

67
Q

inequitable

A

unfair

68
Q

injunction

A

usually a court order to stop a negative stipulation in the contract from being broken. It will not be ordered if damages are a sufficient remedy

69
Q

innocent misrepresentation

A

the maker of the statement had reasonable grounds for believing it was true

70
Q

innocent party

A

the party who has suffered loss because the other party is in default

71
Q

innominate term

A

uncertain whether this is a condition or a warranty

72
Q

intention to create legal relations

A

one of the requirements for a legally binding agreement

73
Q

invitation to tender

A

an invitation to treat

74
Q

invitation to treat

A

a stage in negotiations where one party is inviting others to make an offer, which he is free to accept or reject.

75
Q

just apportionment

A

statute law has provisions for a fair adjustment of costs incurred under a contract discharged by frustration

76
Q

lapse

A

no longer valid, for instance, an offer has lapsed if it has not been accepted within the set time limit

77
Q

last shot rule

A

parties have exchanged their own standard contracts and the conditions laid down in the acceptance will be the ones to determine the contract

78
Q

letter of comfort

A

a letter written in support of someone who is applying for a loan

79
Q

letter of guarantee

A

a declaration to guarantee the payment of a debt incurred by another if that other fails to repay (garantstelling)

80
Q

letter of intent

A

not a contract. It will only be binding if it can be proced that this document was indeed intended by the parties to be a binding contract, not just an agreement to agree. This depends on the presence of fundamental terms and the charactaristics of a final agreement

81
Q

‘lie where they fall’

A

in common law, there is no just apportionment for costs incurred when a contract is discharged by frustration and it is not possible to recover money

82
Q

liquidated damages

A

or specified damages: the parties themselves specify the damages

83
Q

liquidated damages clause

A

a proper attempt to pre-estimate the loss that would result if the other party breaches the contract

84
Q

main purpose rule

A

an exemption clause is not intented to defeat the main purpose of the contract

85
Q

mandatory injunction

A

a court order requiring the defendant to act

86
Q

material breach

A

US term for fundamental breach

87
Q

merchant

A

professional contracting party

88
Q

minor

A

a person under 18

89
Q

misrepresentation

A

a false statement. Can be fraudulent, negligent or innocent

90
Q

mistake

A

if the mistake is of an operative and fundamental character, which goes to the very substance of the contract, and existed at the time the contract was entered into, the contract will be void

91
Q

mistake as to identity

A

a party is mistaken as to the identity of the other party

92
Q

mistake as to quality

A

mistake as to the quality of the subject matter of the contract is not usually sufficient to make the contract void

93
Q

mitigation

A

minimising loss by the innocent party (schadebeperkingsplicht)

94
Q

mutual mistake

A

parties are at cross-purposes

95
Q

naturally arising

A

damages may be climed for losses that arise naturally from the nature of the contract

96
Q

negligent misreprentation

A

a lack of reasonable care was taken in making the statement

97
Q

nominal consideration

A

something of minimal value exchanged in order to make the other party’s promise legally enforceable

98
Q

non-consumer

A

a person acting other than a consumer

99
Q

non est factum

A

in general, a person is bound by the terms of the contract, even if he has not read them. Non est factum is a defence against this: the contract is something fundamentally different from what the party intended to sign. If this defence succeeds the contract is void ab initio

100
Q

notice of default

A

notice is given to the defaulting party that he is in breach of contract and he is given a fixed period of time to fulfil his duties. This is not a requirement in UK law as it is with the Dutch ingebrekestelling

101
Q

of the essence

A

a term that is of fundamental importance

102
Q

offer

A

willingness to enter into a contract without further negotiations

103
Q

parol evidence rule / four corners rule

A

the rights and duties created by the written agreement must be looked for only within the four corners of the writing itself. Earlier drafts are irrelevant

104
Q

partial performance

A

the performance is not exact and complete

105
Q

past consideration

A

past consideration is not valid, because it refers to something that already has been done before the promise was made

106
Q

penalty clause

A

punishing the other party for a breach. in UK law, these clauses are in principle unenforceable

107
Q

peppercorn rent

A

nominal consideration has been given in order to make the agreement legally binding

108
Q

performance

A

to carry out contractual obligations

109
Q

postal rule

A

if acceptance is to be communicated by post, the acceptance is only complete when the letter is posted, even if the letter is never delivered

110
Q

pre-contractual

A

a period of negotiation

111
Q

presumption

A

the law makes certain presumptions based on the facts. in order to override this presumption, a party must bring forward further evidence

112
Q

previous course of dealing

A

an exclusion clause may have been incorporated because parties have contracted before on the same consistent terms

113
Q

prima facie

A

at first sight

114
Q

principle of good faith

A

redelijkheid & billijkheid does not apply in common law

115
Q

privity of contract

A

a contract only confers rights and duties to the parties signing the contract

116
Q

promissory estoppel

A

equitable principle. A one-sided promise may be binding if there is an existing legal relationship and the promisor has promised not to enforce a legal right. Having induced reliance on this promise, it would be inequitable not to enforce the promise

117
Q

proximate

A

damages are awarded for a loss that clearly results from an event of default

118
Q

quantum meruit

A

‘as much as he deserves’

119
Q

reasonable

A

an exclusion clause must be reasonable

120
Q

reasonable person

A

objective test

121
Q

rebut

A

to refute or to oppose

122
Q

reliance loss damages

A

a party to a contract has the right to claim damages with respect to expenses that have been incurred because that party had relied upon the other party performing his obligations under the contract

123
Q

remoteness of damage

A

the loss suffered by the innocent party must be either a natural cause of the breach or reasonable within the contemplation of the parties as the propable result of a breach, if not, the damage is too remote and no damages can be claimed.

124
Q

representation

A

a statement that induces the contract but does not itself form a part of that contract

125
Q

repudiation

A

the other party makes it clear that he will not (continue to) perform the contract

126
Q

rescission

A

the representee can opt to have a voidable contract set aside, ie to rescind the contract. In the case of a misrepresentation, the contract can be terminated retrospectively and the parties are put back in the position they were in before the contract was made

127
Q

restitutio in integrum

A

‘to restore something to its original state’

128
Q

revoke

A

an act of annulment, such as withdrawing an offer

129
Q

rights and obligations

A

are set out in the terms of the contract

130
Q

rule in Pinnel’s case

A

the payment of a lesser amount than is owed, cannot discharge the obligation to pay the full amount, even if the creditor has agreed to accept the lesser amount, unless there is fresh consideration

131
Q

rule of construction

A

interpretation of a clause, in order to reflect the parties’ intention when making the clause

132
Q

rule of law

A

unlike a rule of construction, this must be applied whether it would mean giving effect to the parties’ intention or not

133
Q

sale of goods

A

transferring property for money consideration. Goods are tangible, moveable, personal property. Excluded from this category are real property, money, choses in action and intangibles (like shares).

134
Q

set aside

A

to annul or make void. A voidable contract is valid until it is set aside

135
Q

signatory

A

one who signs a document

136
Q

simple contract

A

a contract that does not have to be in a particular form

137
Q

sit on the breach

A

the innocent party should mitigate his damage and not just sit still and do nothing

138
Q

special notice

A

if a claimant wants to claim damages for losses that do not arise naturally from the contract, then he must give the other party notice of special circumstances that would make such losses probable.

139
Q

specific performance

A

a court order to make a person carry out his obligations under a contract. This is a discretionary remedy and will not be ordered if damages are a sufficient remedy

140
Q

statement of fact

A

in order to be classed as misrepresentation, the statement must be a fact, not an opinion

141
Q

substantial performance

A

the contractual obligations are as good as fulfilled except for a few minor aspects

142
Q

sufficient

A

the consideration has some value so it is sufficient

143
Q

suspension of performance

A

not possible in common law like the Dutch opschorting

144
Q

tender

A

offer to provide goods or services for a specified price; an invitation to treat

145
Q

termination

A

a contract is brought to an end

146
Q

terms

A

parts of a contract, either conditions or warranties

147
Q

trade usage

A

when a contract is silent on the matter, a term can be incorporated into a contract reflecting local custom or trade usage in a particular sector

148
Q

uberrimae fidei

A

‘of the utmost good faith’. Contracts that are uberrimae fidei have a duty of full disclosure

149
Q

unconscionability / unconscionable inadequacy

A

mostly in US law. it allows a contract to be set aside where there is an unconscionable bargain, ie a bargain that is so detrimental to one of the patries as to be an affront to what can be considered reasonable

150
Q

undue influence

A

improper pressure other than violence to make someone enter into a contract

151
Q

unfair contract terms

A

refers in particular to the use of exclusion clauses

152
Q

UCC

A

Uniform Commercial Code, a uniform set of rules in the US to govern commercial transactions, but not all of them

153
Q

unilateral contract

A

there is no exchange of promises. instead, one party provides consideration in the form of a promise and the other party provides consideration in the form of an act

154
Q

unilateral discharge

A

when there has been (partial) performance by only one party, there can only be discharge if the other party draws up a deed or provides fresh consideration

155
Q

unilateral mistake

A

a ground for making the contract void, where only one of the parties is mistaken and the other party is aware of the mistaken assumption. These cases often also involve misrepresentation.
A mistake makes the contract void from the outset, but misrepresentation makes a contract voidable.

156
Q

unliquidated damages

A

the calculation of the damages is at the discretion of the court

157
Q

vitiating factor

A

a defect that was present in the agreement at the time the contract was concluded. This defect is sufficiently serious to have the contract set aside. These factors are misrepresentation, mistake, duress and undue influence

158
Q

void

A

the contract was never legally valid and has no legal effect

159
Q

voidable

A

a valid contract containing a vitiating factor. It is valid until one of the parties takes steps to rescind the contract

160
Q

waiver

A

a party gives up his right to insist upon precise performance under the contract

161
Q

warranties and indemnities

A

here, a warranty is a guarantee, ie a promise that the facts are as stated. It is usually connected to a promise to indemnify the promisee fo any loss that he sustains for having relied on the promise if the promise is false. These clauses are also known as indemnity clauses

162
Q

warranty

A
  • a term of lesser importance in a contract.If it has been breached, the innocent party has the right to claim damages
  • guarantee
  • US: warranties and indemnities in the sale of goods. These are express (affirmation or promise) or implied (buyer expresses a particular purpose to the seller). If the goods do not conform to the warranty, the innocent party can bring an action for breach of warranty

Legal English Terminology (5 decks)

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