Contract Law Vocab Flashcards
1
Q
Ab initio
A
Ab initio: Latin term meaning ‘from the beginning’. A contract terminated ab initio returns the parties to the pre-contractual position.
2
Q
Acceptance
A
Acceptance: this is the acceptance of an offer either by words or conduct. There must be unconditional assent. The acceptance must, at common law, mirror the offer. This is known as the mirror image rule.
3
Q
Accord and satisfaction
A
Accord and satisfaction: the accord is the agreement to discharge a contract, and the satisfaction is the consideration needed.
4
Q
Adequate
A
Adequate: the legal term adequate refers to the requirement of consideration for the formation of a contract. That consideration does not have to be adequate means the consideration given by one party does not have to be equal to that given by the other party.
5
Q
Affirm
A
Affirm: if a contract has been affirmed, in other words, accepted by a party once he knows of a defect, the right to rescind the contract is lost.
6
Q
Agreements to agree
A
Agreements to agree: are in principle not binding but simply an expression of the intentions of the parties. Documents in this category include a letter of intent (see below), a memorandum of understanding and heads of agreement. These are documents reflecting what has been agreed to in principle so far, but negotiations have not been completed. However, the fact that a document is called a memorandum of understanding or heads of agreement etc. does not necessarily mean the courts will treat the agreement as no more than an agreement to agree if a contrary intention appears from the document and the terms are sufficiently clear.
7
Q
Anticipatory breach
A
Anticipatory breach: where a party makes it clear before the performance date is due that he will not perform his obligations under the contract.
8
Q
Bars to rescission
A
Bars to rescission: it is not always possible to rescind a contract. The right is lost where there has been affirmation, restitutio in integrum is impossible or third party rights have intervened.
9
Q
Battle of the forms
A
Battle of the forms: this term applies to the situation where parties have exchanged their own standard contracts and it is unclear whether the conditions laid down in the offer or the acceptance govern the contract.
10
Q
Bilateral discharge
A
Bilateral discharge: where both parties have not performed under the contract, discharge by agreement takes place by an exchange of promises not to enforce the original contract.
11
Q
Binding
A
Binding: an agreement between two or more parties that is binding in law is a legally enforceable agreement.
12
Q
Breach of contract
A
Breach of contract: the refusal or failure by a party to a contract to perform an obligation imposed on him under the contract. Damages are available for any breach, but if the defaulting party has committed a very serious breach, the innocent party has the right to choose whether to end the contract as well as the right to claim damages.
13
Q
Business efficacy rule
A
Business efficacy rule: a court may be prepared to imply in a term if the agreement was clearly intended to create a legal relationship and, unless a term is implied in, the contract cannot function.
14
Q
Capacity
A
Capacity: refers to the ability of a natural or legal person to enter into a contract.
15
Q
Caveat emptor
A
Caveat emptor: Latin phrase meaning ‘let the buyer beware’.
16
Q
Collateral contract
A
Collateral contract: one party enters into the main contract on the basis of a promise made by the other party.
17
Q
Collective agreements
A
Collective agreements: these take the form of an agreement between trade unions and an employer.
18
Q
Common mistake
A
Common mistake: the mistake is common where both parties mistakenly believe the same thing, and the mistaken assumption was based on a reasonable ground.
19
Q
Condition
A
Condition: in English contract law it signifies a fundamental term of the contract. If it is breached, the innocent party may not only claim damages but may also opt to treat the contract as ended.
20
Q
Condition precedent
A
Condition precedent: is a condition stating that a right will not be granted until some future event.
21
Q
Condition subsequent
A
Condition subsequent: is a condition stating that the contract can be modified or set aside if some event occurs later.
22
Q
Consensus ad idem
A
Consensus ad idem: Latin term referring to the need for a meeting of minds in order for there to be contractual agreement between the parties.
23
Q
Consequential loss
A
Consequential loss: unusual or special loss that would not necessarily be caused by the breach.
24
Q
Consideration
A
Consideration: the bargain. Each party gives value to the other either by exchanging promises or by a promise given in exchange for an act. A one-sided promise is not a binding contract, unless by deed.
25
Construction
Construction: where the court interprets the meaning of words.
26
Consumer
Consumer: a person not acting in the course of business. There are special rules that apply to contracts where one of the parties is acting as a consumer.
27
Contract
Contract: a contract is a legally enforceable agreement.
28
Contracts in restraint of trade
Contracts in restraint of trade: are those preventing the free exercise of trade or business. They are prima facie void unless it can be shown that the provision is reasonable as between the parties and not against the public interest.
29
Contract of adhesion
Contract of adhesion: typically a standard form contract on a ‘take it or leave it’ basis offered by a party in a superior bargaining position. The other party has no ability to negotiate the terms.
30
Contra proferentem rule
Contra proferentem rule: an exclusion clause is interpreted strictly, so if there is any ambiguity in the wording of an exclusion clause, the clause will be construed as narrowly as possible against the one relying on the clause.
31
Counter-offer
Counter-offer: where not all of the terms of an offer are accepted, then there is no acceptance but a counter-offer.
32
Damages
Damages: in contract law, financial compensation which should put the claimant in the position he would have been in if the contract had been performed properly.
33
Deed
Deed: a written document that has been signed by the parties and witnesses.
34
Digital content
Digital content: in consumer rights legislation, it refers to data produced and supplied in digital form, for example, on-line films, games, e-books, downloaded music and apps.
35
Discharge
Discharge: release from the obligations under a contract. Discharge may be by performance, agreement, breach or frustration.
36
Discharge by agreement
Discharge by agreement: both parties agree to end the contract.
37
Discharge by breach
Discharge by breach: a contract may be discharged by breach where the party in default has repudiated the contract either before performance is due or before it has been fully performed, or where there has been fundamental breach.
38
Discharge by frustration
Discharge by frustration: parties are excused from the contract if, through no fault of either party, after the formation of the contract it becomes impossible to carry out the contract or the contract has become commercially sterile or futile.
39
Discharge by performance
Discharge by performance: the obligations under the contract have been carried out.
40
Distance selling
Distance selling: selling and buying goods and services or digital content via Internet, mail order, phone or television.
41
Divisible contract
Divisible contract: in this case, a contract can be divided into a number of specific parts.
42
Doctrine of impossibility
Doctrine of impossibility: term often used in the United States for the doctrine of frustration.
43
Duress
Duress: violence or threats of violence in order to make someone enter into a contract. The contract is arguably void from the outset. If it is seen as voidable, it can be set aside. Economic duress may also make a contract voidable. To claim economic duress, a party must show that he was put under economic pressure to enter the contract and that pressure was of an illegitimate nature, going beyond acceptable commercial practice. The coercion was such that it undermined the requirement of a voluntary acceptance of an offer.
44
Entire contract
Entire contract: a contract that is not divisible into sets of obligations.
45
Exceptio non adimpleti contractus
Exceptio non adimpleti contractus: Latin phrase referring to a principle in the civil law, which allows the innocent party to suspend his own performance of the contract until the other party has fulfilled an agreed obligation.
46
Exclude
Exclude: to rule out liability for contractual failure.
47
Exclusion, exemption or limitation clause
Exclusion, exemption or limitation clause: term to exclude or limit the liability of a party for breach of contract, misrepresentation or negligence.
48
Executed consideration
Executed consideration: where one party performs an act in fulfilment of a promise made by the other, as in a unilateral contract.
49
Executory consideration
Executory consideration: the term used to refer to an exchange of promises to perform acts in the future.
50
Expectation damages
Expectation damages: damages the innocent party can claim in a breach of contract action, where the damages take into account the profit the innocent party should have received if the defaulting party had performed the contract as agreed.
51
Ex post facto warranty
Ex post facto warranty: if the innocent party chooses to continue the contract, even though a condition has been breached, then the condition is treated as a warranty, and the obligation is then referred to as an ex post facto warranty and only damages may then be claimed.
52
Express terms
Express terms: terms explicitly stated by the parties, either oral or written.
53
Firm offer
Firm offer: in English law this simply means that the offer is unequivocal. It does not mean that the offer cannot be withdrawn. In English law an offer can be withdrawn any time before acceptance even if a promise was made to keep the offer open. That promise to keep the offer open would only be binding if there is a separate contract where value for the promise has been given. This is known as an option contract.
54
Force majeure
Force majeure: most contracts include a force majeure clause. This lists events considered to be outside the control of the parties and for which the parties cannot be considered to be in breach.
55
Fraudulent misrepresentation
Fraudulent misrepresentation: the person knew that the statement was untrue, or was reckless as to whether it was true.
56
Frustrating event
Frustrating event: an event beyond the control of the parties that has made it either impossible to carry out the contract or commercially pointless to do so.
57
Frustration of the common venture
Frustration of the common venture: a contract can be discharged by frustration where there is no physical destruction of the subject matter, but the essential commercial purpose of the contract no longer exists.
58
Fundamental term/breach
Fundamental term/breach: a term is fundamental if it goes to the root of the contract. If it is breached, the breach is referred to as fundamental breach.
59
Good faith
Principle of good faith: here, negotiations and contractual relations should be characterised by honesty and fairness, by the intention to carry out contractual obligations, and with no intention to seek an unfair advantage or purposefully act to the detriment of the other party. This principle is not operative in the common law of contract.
60
Guarantee
Guarantee: a legally enforceable promise that the goods are of good quality and will work properly. This is sometimes referred to as a warranty.
61
Honour clause
Honour clause: this clause makes clear that there is no intention to create legal relations.
62
Illegality
Illegality: certain types of contracts are illegal and therefore void.
63
Implied terms
Implied terms: terms that can be read into the contract, either by custom, by statute or by the courts.
64
Incorporation
Incorporation: the exemption clause must have been incorporated into the contract, either by including it in a signed document or by giving notice of it where there is no written document.
65
Indemnify
Indemnify: to reimburse someone for the damage that he has suffered, a statement of liability to pay compensation for a loss or for a wrong in a transaction.
66
Indemnity
Indemnity: an order of rescission may be accompanied by the court ordering an indemnity. An indemnity is not the same as damages; it is simply to put the parties back in the pre-contractual position, so that the innocent party is neither better off nor worse off than before.
67
Induce
Induce: to encourage or persuade someone. It is used here in the sense of encouraging someone to enter into a contract.
68
Inequality of bargaining power
Inequality of bargaining power: one party to a contract may have a dominant bargaining position and the other party has little bargaining power, and therefore little choice. As a consequence, the bargain is very one-sided.
69
Inequitable
Inequitable: unfair, against the principles adopted by the court of equity.
70
Injunction
Injunction: with respect to contract law, usually a court order to stop a negative stipulation in the contract from being broken. It is a discretionary remedy and will not be ordered if damages are a sufficient remedy.
71
In lieu of
In lieu of: instead of, for example, damages instead of rescission.
72
Innocent misrepresentation
Innocent misrepresentation: the maker of the statement had reasonable grounds for believing that it was true.
73
Innocent party
Innocent party: the term refers to the party to a contract who has suffered loss because the other party is in default.
74
Innominate term
Innominate term: a term is classed as innominate where it is uncertain whether it is to be treated as a condition or as a warranty.
75
Intention to create legal relations
Intention to create legal relations: there must be an intention to create a legally binding agreement.
76
Invitation to tender
Invitation to tender: although a tender is an offer, an invitation to tender will usually be an invitation to treat.
77
Invitation to treat
Invitation to treat: this is a stage in negotiations where one party is inviting others to make an offer, which he is free to accept or reject. An invitation to treat is not an offer.
78
Just apportionment
Just apportionment: statute law makes provision for a fair adjustment of costs incurred under a contract discharged by frustration.
79
Lapse
Lapse: no longer valid. An offer is said to lapse when the time in which the offer could be accepted has expired or, if no time limit was set, a reasonable time has expired.
80
Last shot rule
Last shot rule: where parties have exchanged their own standard contracts, the last shot rule means that the conditions laid down in the acceptance will be the ones to determine the contract.
81
Letter of comfort
Letter of comfort: this type of letter is usually written in support of someone who is applying for a loan and offers the potential offeror reassurance.
82
Letter of guarantee
Letter of guarantee: this letter takes the form of a declaration to guarantee the payment of a debt incurred by another if that other fails to repay.
83
Letter of intent
Letter of intent: this letter is not a contract. Its terms are not legally binding. In the common law, it is considered simply to be an attempt to put a preliminary understanding into a written form. A letter of intent will only be binding, therefore, if it can
be proved that this document was indeed intended by the parties to be a binding contract, not just an agreement to agree. The courts will take into account various factors, such as whether fundamental terms are dealt with and whether it has the characteristics of a final agreement.
84
‘Lie where they fall’
‘Lie where they fall’: at common law there is no just apportionment for costs incurred when a contract is discharged by frustration. It is generally not possible to recover money due or paid before the frustrating event.
85
Liquidated damages
Liquidated damages: also referred to as specified damages; where the parties themselves, rather than the court, have determined the level of damages.
86
Liquidated damages clause
Liquidated damages clause: a proper attempt to pre-estimate the loss that would result if the other party breaches the contract.
87
Main purpose rule
Main purpose rule: it is presumed that an exemption clause is not intended to defeat the main purpose of the contract.
88
Mandatory injunction
Mandatory injunction: a court order requiring the defendant to act.
89
Material breach
Material breach: term used in the United States to indicate a fundamental breach of contract. Material breach occurs when either a strict performance standard or a substantial performance standard has not been met. It gives the innocent party the right to terminate the contract as well as sue for damages. When a breach is not serious enough to be material, it is called nonmaterial breach.
90
Merchant
Merchant: the term merchant is used in the American UCC to indicate a professional contracting party or one skilled in an occupation.
91
Minor
Minor: a minor is a person under the age of majority, the age of majority being eighteen years in English law.
92
Misrepresentation
Misrepresentation: where the representation is a false statement, it is called a misrepresentation. Misrepresentations can be fraudulent, negligent or innocent.
93
Misrepresentor/misrepresentee
Misrepresentor/misrepresentee: the misrepresentor is the one making the false statement; the misrepresentee is the one to whom the false statement is made.
94
Mistake
Mistake: where 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.
95
Mistake as to identity
Mistake as to identity: this is usually a unilateral mistake where one party is mistaken as to the identity of the other party.
96
Mistake as to quality
Mistake as to quality: mistake as to the quality of the subject matter of the contract is not usually sufficient to make the contract void.
97
Mitigation
Mitigation: the innocent party must take reasonable steps to minimise his loss.
98
Mutual mistake
Mutual mistake: is where the parties are at cross-purposes, the offer being made in one sense and accepted in another.
99
Naturally arising
Naturally arising: damages may be claimed for losses that arise naturally from the nature of the contract.
100
Negligent misrepresentation
Negligent misrepresentation: a lack of reasonable care was taken in making the statement.
101
Nominal consideration
Nominal consideration: something of minimal value exchanged in order to make the other party’s promise legally enforceable.
102
Non-consumer
Non-consumer: a person acting other than as a consumer, carrying out some form of commercial activity.
103
Non est factum
Non est factum: in general, a person is bound by the terms of a document that he has signed, even if he has not read it or understood it. The non est factum defence forms an exception to this rule in certain circumstances.
104
Notice of default
Notice of default: notice is given to the defaulting party that he is in breach of contract, and a period of time is usually specified within which the defaulting party must fulfil his obligations. Notice is not a general requirement in English law, although certain exceptions are made, for example, notice of default must be given in a consumer hire purchase contract. Parties are also free to agree to give such notice.
105
Of the essence
Of the essence: words used in a contract to show that a particular term is of fundamental importance.
106
Offer
Offer: an offer shows a willingness to enter into a contract without further negotiations. (Compare invitation to treat, which is merely a step in negotiations.)
107
Offeror/offeree
Offeror/offeree: the one making an offer is called the ‘offeror’. The person to whom an offer is made is called the ‘offeree’.
108
Parol evidence rule
Parol evidence rule (four corners rule): where a contract is embodied in a written document, then extrinsic (parol) evidence is not admissible to add to, vary, subtract from or contradict the terms of the written document. The rights and duties created by the written agreement must be looked for only within the four corners of the writing itself.
109
Partial performance
Partial performance: where the performance is not exact and complete.
110
Past consideration
Past consideration: past consideration is not valid, as it refers to a promise made upon past consideration, in other words, in response to something that has already been done before the promise was made. Where a promise is made after the transaction for past favours, no contract will arise.
111
Penalty clause
Penalty clause: the penalty is meant to punish the other party for breach, or deter him from breaching the contract. In English law, penalty clauses are in principle unenforceable.
112
Peppercorn rent
Peppercorn rent: where nominal consideration has been given in order to make the agreement legally binding.
113
Performance
Performance: to carry out obligations under a contract.
114
Postal rule
Postal rule: in English law, where acceptance is to be communicated by post, then acceptance is complete when the letter is posted, even if the letter is never delivered.
115
Pre-contractual
Pre-contractual: this term indicates a period of negotiation prior to entering into a contract.
116
Presumption
Presumption: the law makes certain assumptions based on a set of facts. In order to override a presumption, a party must bring forward further convincing evidence.
117
Previous course of dealing
Previous course of dealing: an exclusion clause may have been incorporated because the parties have contracted before on the same consistent terms.
118
Prima facie
Prima facie: Latin term meaning ‘at first sight’.
119
Principle of good faith
Principle of good faith: here, negotiations and contractual relations should be characterised by honesty and fairness, by the intention to carry out contractual obligations, and with no intention to seek an unfair advantage or purposefully act to the detriment of the other party. This principle is not operative in the common law of contract.
120
Privity of contract
Privity of contract: a contract only confers rights and obligations on the parties to the contract. There are, however, exceptions to this rule both in statute law and common
law.
121
Promisor/promisee
Promisor/promisee: the promisor is the one making the promise; the promisee is the one to whom the promise is made.
122
Promissory estoppel
Promissory estoppel: promissory estoppel is an equitable principle. It may make a one-sided promise binding where 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.
123
Proximate
Proximate: damages are awarded for a loss that clearly results from an event of default.
124
Purchaser
Purchaser: an alternative term for buyer.
125
Quantum meruit
Quantum meruit: the claim of quantum meruit is for ‘as much as he deserves’.
126
Reasonable
Reasonable: in order to prevent the abuse of exclusion clauses, there has been statutory intervention demanding that an exclusion clause must be reasonable. This also gives protection to non-consumers.
127
Reasonable man/person
Reasonable man/person: an objective test to establish the behaviour or expectations of a reasonable person.
128
Rebut
Rebut: to refute or oppose, for example, to rebut a claim or a presumption.
129
Reliance loss damages
Reliance loss damages: 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.
130
Remoteness of damage
Remoteness of damage: the loss suffered by the innocent party must be either a natural cause of the breach or reasonably within the contemplation of the parties as the probable result of a breach. If not, the damage is too remote and no damages can
be claimed.
131
Representation
Representation: it is a statement that induces the contract but does not itself form a part of that contract.
132
Representor/representee
Representor/representee: the representor is the one making the representation; the representee is the one to whom the representation is made.
133
Repudiation
Repudiation: the other party makes it clear, either explicitly or implicitly, that he will not perform or continue to perform the contract.
134
Rescission
Rescission: the representee can opt to have a voidable contract set aside. He is said to rescind the contract. Where there has been a misrepresentation, the contract can be terminated retrospectively. The contract is void and the parties are put back in the position they were in before the contract was made.
135
Restitutio in integrum
Restitutio in integrum: Latin term meaning ‘to restore something to its original state’. Where it is not possible to go back to the original state, the equitable remedy of rescission is not available.
136
Revoke
Revoke: an act of annulment, such as withdrawing an offer.
137
Rights and obligations
Rights and obligations: the terms of the contract set out the legal rights and obligations of the parties.
138
Rule in Pinnel’s case
Rule in Pinnel’s case: 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.
139
Rule of construction
Rule of construction: interpretation of a clause, such as an exclusion clause, in order to reflect the parties’ intention when making the clause.
140
Rule of law
Rule of law: unlike a rule of construction, this must be applied whether it would mean giving effect to the parties’ intention or not.
141
Sale of goods
Sale of goods: a contract for the sale of goods is one in which the seller transfers the property in goods to the buyer for money consideration. Under UK law, the term ‘goods’ refers to tangible, moveable, personal property. Certain forms of property are excluded from the category of goods, such as real property, money in the sense of currency, choses in action and documentary intangibles, such as shares and negotiable instruments. By ‘property’ is meant ownership as distinguished from possession. Contracts that pass possession but not the legal title are not contracts for the sale of goods. The term ‘money consideration’ refers to the price; gifts or exchanges would therefore fall outside this provision, as they are not sales for money.
142
Set aside
Set aside: to annul or make void. A voidable contract is valid until it is set aside.
143
Signatory
Signatory: one who signs a document.
144
Simple contract
Simple contract: a contract that does not have to be in any particular form.
145
Sit on the breach
Sit on the breach: there is a duty on the claimant to take all reasonable steps to mitigate loss. He should not simply do nothing and let the situation deteriorate even further.
146
Special notice
Special notice: 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. Whether the defendant will be held liable for damages not arising naturally from the nature of the contract will depend upon whether he knew of the special circumstances or should have known of them.
147
Specific performance
Specific performance: 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.
148
Statement of fact
Statement of fact: to be classed as a misrepresentation, the statement must be a statement of fact, not of opinion.
149
Statement of opinion
Statement of opinion: in general, a statement of opinion is not classed as a misrepresentation unless it is not actually held or it implies a factual basis.
150
Substantial performance
Substantial performance: substantial performance means that the contractual obligations are as good as fulfilled except for a few minor aspects.
151
Sufficient
Sufficient: where the law recognises the consideration as having some value, the consideration is termed sufficient.
152
Suspension of performance
Suspension of performance: in the common law, there is no general principle allowing an innocent party to suspend his own performance because the other party is in breach.
153
Tender
Tender: a tender is an offer to provide goods or services for a specified price. An invitation to tender is usually not an offer but an invitation to treat.
154
Termination
Termination: a contract is terminated when it is brought to an end. The term termination should be used rather than rescission, where the contract is discharged by breach.
155
Terms
Terms: the promises and stipulations that are part of a contract. Not all of the terms in a contract are of equal importance. English law categorises terms as conditions or warranties.
156
Third party
Third party: one who is not a party to the original contract.
157
Trade usage
Trade usage: where the contract is silent on the matter, a term can be incorporated into a contract reflecting local custom or trade usage in a particular sector.
158
Uberrimae fidei
Uberrimae fidei: this Latin term means ‘of the utmost good faith’. In contracts that are uberrimae fidei there is a duty of full disclosure.
159
Uncertainty
Uncertainty: if a term of a contract is uncertain, it may defeat the contract if that term is of fundamental importance, although there are exceptions to this rule.
160
Unconscionability/unconscionable inadequacy
Unconscionability/unconscionable inadequacy: this doctrine is more developed in American contract law than in English contract law. It allows a contract to be set aside where there is an unconscionable bargain. This is a bargain that is so detrimental to one of the contracting parties as to be an affront to what can be considered reasonable.
161
Undue influence
Undue influence: refers to improper pressure other than violence to make someone enter into a contract.
162
Unfair contract terms
Unfair contract terms: refers in particular to the use of exclusion clauses.
163
Uniform Commercial Code (UCC)
Uniform Commercial Code (UCC): in the United States, all the states have accepted the UCC except Louisiana, which has adopted only part of the Code. The aim of the UCC was to promote a uniform set of rules across America to govern commercial transactions. Not all types of contracts fall within the ambit of the UCC; whereas contracts for the sale of goods come under the UCC contracts such as for the sale of real estate, services and intangibles do not. Those contracts are governed by the common law of contracts.
164
Unilateral contract
Unilateral contract: in this type of contract, 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.
165
Unilateral discharge
Unilateral discharge: where there has been performance or partial performance by only one party, there can only be discharge if the other party draws up a deed or provides fresh consideration.
166
Unilateral mistake
Unilateral mistake: a ground for making a contract void, where only one of the partiesto a contract is mistaken, and the other party is aware of the mistaken assumption. Most cases involving unilateral mistake also involve a misrepresentation. In deciding
to sue for unilateral mistake or misrepresentation, the innocent party should bear in mind that mistake makes a contract void from the outset, so no legal title to property can pass, and misrepresentation makes a contract voidable, meaning that a title can be passed before the contract is set aside.
167
Unliquidated damages
Unliquidated damages: also referred to as unspecified damages. The quantification of damages is at the discretion of the court.
168
Vendor
Vendor: an alternative term for seller.
169
Vitiating factor
Vitiating factor: a vitiating factor is a defect that was present in the agreement at the time the contract was concluded. The defect is sufficiently serious to have the contract set aside. Vitiating factors include misrepresentation, mistake, duress and undue influence.
170
Void
Void: a void contract is one that was never legally valid and is without legal effect.
171
Voidable
Voidable: a voidable contract is a valid contract, but it contains a vitiating factor. That means it can be made void if one of the parties takes steps to rescind the contract.
172
Waiver
Waiver: where one party waives a contractual right; he voluntarily gives up his right to insist upon precise performance under the contract.
173
Warranties and indemnities
Warranties and indemnities: here, a warranty refers to a statement made by one party promising the other party that the facts are as stated. It is usually connected to a promise to indemnify the promisee for any loss he sustains from having relied on the promise if the promise is false. Such clauses are also known as ‘indemnity clauses’.
174
Warranty
Warranty: is a term that has several meanings. It may be used to denote that a guarantee has been given to a product. In English law it is also used to denote a contractual term of lesser importance than a condition. Its breach would not give the
innocent party the option to end the contract, but it would give the innocent party the right to claim damages. In the United States, warranty is used in the sense of warranties and indemnities and in particular in the context of the sale of goods,
where representations made by the seller, either express or implied, become part of the contract of sale. An express warranty is where it has been affirmed or promised that goods will correspond to their description or to a sample or model. There is an implied warranty of merchantability and an implied warranty of fitness if the buyer has expressed 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.
