Contract Law Terms Flashcards
□ capacity
Legal ability to understand the nature and effects of a contract’s components and enter into one.
□ caveat emptor
A latin phrase meaning “let the buyer beware”
□ clerical mistake
An error caused by a clerk or other employee; typically involved numbers; an example of a unilateral mistake
□ consent
Agreement given freely and voluntarily in good faith
□ consideration
- The exchange of something of value from one party to another
- Can be classified as a past, present or future consideration.
□ contract
- An agreement or promise that the law will enforce.
- Types of contracts include, express, implied, simple contracts. Also contracts under seal.
□ duress
- Similar to undue influence, but more extreme.
- Illegal coercion; the threat to use of violence to force a person to do something against their own free will to participate in a contract.
□ elements of a valid contract
Lawful purpose, consideration, capacity, consent, offer and acceptance.
□ express contract
- Can be verbal, or written.
- Clearly defines all terms and conditions
□ fraudulent misrepresentation
- f a seller makes a statement about a material fact knowing it to be false.
- Far more serious than innocent misrepresentation because the seller is lying to cheat, or defraud, the buyer.
□ future consideration
- One of the two forms of legal consideration
- Occurs when one of both of the parties promises to do something in the future.
- Ex. Buying on credit
Not always in the world of business, but rather in sports. Might have to replace a player
□ implied contract
- Only suggested by a person’s actions - nothing is precisely stated or written
Ex. Ordering a meal in a restaurant
□ innocent misrepresentation
- When a person makes a false statement about a material fact that he or she believes to be true.
Where something was misrepresented, not forced, but rather an accident
□ invitation to treat
- Invitations by sellers for cusomers to make an offer to buy the products advertised
- Retailers don’t expect everyone who sees an advertisement to buy the items being promoted
*EX. Advertisements, displays and catalogues *
□ lapse and revocation
- Lapse: When an offer closes due to the acceptance date expiring
- Revocation: When an offer is withdrawn before being accepted
□ lawful purpose
Finally, the contract has a lawful purpose (object - there is nothing illegal about buying a snowboard)
□ meeting of the minds
A situation in which both parties clearly understood the rights and responsibilities in the contract that developed.
offer and acceptance
a proposal that expresses the willingness 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”
□ offeree
Determines whether or not to accept the offer presented by the offeror
□ offeror
Must make a clear, precise offer
□ performing
Forming and performing (completing) a contract)
□ restraint of trade
- Business contracts may be challenged on grounds of public policy if they are in restraint of trade.
- Restraint of trade is enforced to promote competition. However, if the period is too long or unreasonable, the contract may be void.
□ simple contract
They can be verbal, written or implied.
Ex. Most day to day transactions
□ unilateral mistake
- A contract can be void and unenforceable if one party has made a mistake and the other party knew of the mistake but made no attempt to correct it.
*EX. when you try to buy a knife to cut a rock, but the seller knows it wont cut a rock and doesn’t tell you. *
