Contracts

Question 1

Response by the person receiving the offer that indicates willingness to enter into the agreement proposed in the offer

Answer 1

Acceptance

Question 2

Formed when the creditor accepts the debtor’s offer to settle the dispute for an amount less than the creditor claims is due

Answer 2

Accord

Question 3

agreement to accept performance that is different from what is called for in the contract.

Answer 3

Accord and satisfaction

Question 4

When one party knows ahead of time (before performance is due) that the other party will breach the contract

Answer 4

Anticipatory repudiation (of a contract)

Question 5

Promise given in exchange for another promise. One party agrees to do one thing, and the other party agrees to do something in return

Answer 5

Bilateral contract

Question 6

A violation of the terms of a contract

Answer 6

Breach of contract

Question 7

(no party is a minor or incompetent person unless that party ratifies contract)

Answer 7

Capacity

Question 8

Damages that compensate for the economic loss caused by the breach of contract

Answer 8

Compensatory damages

Question 9

The party’s duty to perform requires that each party perform for the other at the same time

Answer 9

Condition concurrent

Question 10

An event that must or must not occur before performance is due

Answer 10

Condition precedent

Question 11

The party has a duty to perform until a future event occurs that discharges the party

Answer 11

Conditional subsequent

Question 12

The plaintiff is entitled to it in addition to damages that compensate for the breach itself: compensation for losses that occurred as a foreseeable result of the breach

Answer 12

Consequential damages

Question 13

Each party must transfer something of legal value to the other

Answer 13

Consideration

Question 14

A legally enforceable promise or set of promises. If the promise is broken, the person to whom the promise was made—the promisee—has certain legal rights against the person who made the promise—the promisor

Answer 14

Contract

Question 15

An offer made in retort to another offer

Answer 15

Counteroffer

Question 16

An agreement, generally part of an employment contract or a contract to sell a business, in which one party agrees to refrain from competing with the other party for a specific period of time and within a particular area

Answer 16

Covenant not to compete

Question 17

Promises to do or refrain from doing something

Answer 17

Covenants

Question 18

Procure substitute goods or service

Answer 18

Cover

Question 19

If the promisee entered into the contract to discharge a duty he or she owed to the third party, then the third party is a … and has the right to enforce the contract between the promisor and
promisee

Answer 19

Creditor beneficiary

Question 20

When an offeree has changed his or her position because of justifiable reliance on the offer

Answer 20

Detrimental reliance

Question 21

When the contractual obligations have been satisfied or

terminated in other words … .

Answer 21

Discharged

Question 22

A … is created when the promisee does not owe an obligation to the third party, but rather wishes to confer a gift

Answer 22

Donee beneficiary

Question 23

A contract is voidable if one party was forced to enter
into it through fear created by threats. Thus, inducing
someone to sign a contract by physical threat,
blackmail, or extortion is …

Answer 23

Duress

Question 24

Under the …, if an agent acts on
behalf of another (the principal) in signing an agreement of the type that must, under the statute of frauds, be in writing, the authority of the agent to act on behalf of the principal must also be in writing

Answer 24

Equal dignities rule

Question 25

A contract under which the parties have continuing | obligations to perform

Answer 25

Executory contract

Question 26

... give the nonbreaching party the benefit of its bargain, putting the plaintiff in the cash position it would have been in if the contract had been fulfilled.

Answer 26

Expectation damages

Question 27

... occurs when, because of a misrepresentation, or untrue statement of material fact, one party does not understand that he or she is entering into a contract or does not understand one or more essential terms of the contract

Answer 27

Fraud in the factum

Question 28

..., occurs when a party makes a false statement to persuade the other party to enter into an agreement

Answer 28

Fraud in the inducement

Question 29

... occurs when performance is possible, but changed circumstances have made the contract useless to one or both of the parties

Answer 29

Frustration of purpose

Question 30

A ... purports to relieve the owner of the facility of any liability, including liability for negligence that results in injuries to a person using the facility

Answer 30

general release

Question 31

Promise that imposes no obligation on the promisor

Answer 31

Illusory promise

Question 32

Every contract contains an ... that imposes on each party a duty not to do anything that will deprive the other party of the benefits of the agreement

Answer 32

implied covenant of good faith and fair dealing

Question 33

If for some unforeseen unpredictable reason, a contract is not possible to perform then there would be no entitlement to financial compensation for the hurt party. However, must fit extreme rules for what is impossible

Answer 33

Impossibility

Question 34

Closely related to impossibility is the concept of ..., where performance is possible but commercially impractical. As a rule, ... is difficult to prove

Answer 34

impracticability

Question 35

In addition to compensatory and consequential damages, a nonbreaching party may incur lesser, relatively minor damages known as ...

Answer 35

incidental damage

Question 36

A court order forcing the promisor to perform the promise.

Answer 36

Injunction

Question 37

At some point in the negotiations, the parties will usually manifest an intention, either orally or in writing, to enter into a contract

Answer 37

Intent to be bound

Question 38

... cannot be terminated by the offeror

Answer 38

Irrevocable offer

Question 39

The parties to a contract may include a clause that specifies the amount of money to be paid if one of them should later breach the agreement. Such ... are frequently used in real estate and construction contract

Answer 39

liquidated damages clauses

Question 40

An agreement between two companies to combine into | a single entity

Answer 40

Merger agreement

Question 41

The traditional concept of contract formation requires that what the offeree accepts must be exactly the same as what the offeror has offered. If it is not, the ... dictates that no contract has been formed

Answer 41

mirror image rule

Question 42

Untrue statement of material fact

Answer 42

Misrepresentation

Question 43

Like a misunderstanding due to ambiguity, a ... by both parties can make a contract voidable

Answer 43

mistake of fact

Question 44

A ... occurs when the parties make an erroneous assessment about some aspect of what is bargained for

Answer 44

mistake of judgment

Question 45

Lessen the amount of damages that flow from a breach

Answer 45

Mitigate

Question 46

If both parties agree, they may also terminate the contract by ... . A ... is itself a type of contract and, as such, requires a valid offer, acceptance, and consideration

Answer 46

mutual rescission

Question 47

The corollary of consideration in the case of bilateral contracts is the concept of ... . To be enforceable, a bilateral contract must limit the behavior of both parties in some fashion. If one party has full freedom of action, there is no contract

Answer 47

mutuality of obligation

Question 48

One technique is ..., by which a new party is substituted for one of the original parties, and a new contract is written (with the consent of all original and new parties) to effect the desired change

Answer 48

novation

Question 49

An ... is a manifestation of willingness to enter into a bargain that justifies another person in understanding that his or her assent will conclude the bargain

Answer 49

offer

Question 50

Intended recipient

Answer 50

Offeree

Question 51

The person making the offer

Answer 51

Offeror

Question 52

... arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice for one party to the contract

Answer 52

Oppression

Question 53

An ... is created when an offeror agrees to hold an offer open for a certain amount of time in exchange for some consideration from the other party

Answer 53

option contract

Question 54

Agreement to purchase all of a particular producer's production (exclusive contract)

Answer 54

Output contract

Question 55

Under the ..., when there is an unambiguous written contract that the parties intended would encompass their entire agreement, parol (that is, oral) evidence of prior or contemporaneous statements is inadmissible in court and cannot be used to interpret, vary, or add to the terms of the written contract

Answer 55

parol evidence rule

Question 56

... to authorize a person, called an | attorney in-fact (who need not be a lawyer), to sign documents on their behalf

Answer 56

Power of attorney

Question 57

Liability imposed on a party for losses caused to the other party during negotiations that fail to ripen into a binding contract

Answer 57

Precontractual liability

Question 58

An agreement entered into before marriage that sets forth the manner in which the parties’ assets will be distributed and the support to which each party will be entitled in the event of divorce.

Answer 58

Prenuptial agreement

Question 59

A ... can maintain an action on a promise made | to him

Answer 59

promisee

Question 60

A ... is someone who makes a promise to a promisee

Answer 60

promisor

Question 61

The legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract. Applies only if the injured party can prove that (1) there was a promise on which the promisee justifiably relied, (2) the reliance was foreseeable, and (3) injustice would result if the court provided no relief to the promisee

Answer 61

Promissory estoppel

Question 62

... occurs when one party makes a promise without any intention of carrying it out. This is a misrepresentation of intent, rather than a misrepresentation of fact

Answer 62

Promissory fraud

Question 63

... occurs when a salesperson “gives voice to ‘the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.’

Answer 63

Puffing

Question 64

Under the doctrine of ..., the agency’s default on payment renders the entrepreneur liable to the publication for the value of the benefit the entrepreneur received

Answer 64

quantum meruit

Question 65

To ... is to (subsequently agree to be bound by) | contracts after they reach majority or gain competency

Answer 65

ratify

Question 66

... compensate the nonbreaching party for any expenditures it made in reliance on the contract

Answer 66

Reliance damages

Question 67

Statements about the entity being sold and the buyer

Answer 67

Representations and warranties

Question 68

Occurs when a seller agrees to supply the needs of a | buyer (exclusive contract)

Answer 68

Requirements contract

Question 69

... looks at what the other party has gained from the transaction. The usual measure of ... is the amount it would cost the recipient of the benefit to buy that benefit elsewhere.

Answer 69

Restitution

Question 70

To take back – to cancel

Answer 70

Revoke

Question 71

the discharge of the debt

Answer 71

Satisfaction

Question 72

According to the ..., the government generally cannot be held liable for breach of contract due to legislative or executive acts

Answer 72

sovereign acts doctrine

Question 73

Instead of awarding monetary damages, a court may order the breaching party to complete the contract as promised, a remedy known as ...

Answer 73

specific performance

Question 74

Although most oral contracts are enforceable, many states have a statute, called the ..., that requires certain types of contracts to be evidenced by some form of written communication

Answer 74

statute of frauds

Question 75

... arises when the terms of the contract are hidden in a densely printed form drafted by the party seeking to enforce these terms

Answer 75

Surprise

Question 76

A person who is not a party to a contract can sometimes still enforce it, this person would be a ... to the contract.

Answer 76

third party (third party beneficiary)

Question 77

A contract term is ... if it is so oppressive or fundamentally unfair as to “shock the conscience” of the court

Answer 77

unconscionable

Question 78

Under the related doctrine of ..., a court may invalidate an agreement if one party exercised improper persuasion on the other, making genuine assent impossible

Answer 78

undue influence

Question 79

A promise given in exchange for an act

Answer 79

Unilateral contract

Question 80

Synonym for Promissory estoppel

Answer 80

Unjust enrichment

Question 81

Sometimes a statute will expressly make certain types of contracts illegal. For example, ... limit the interest rate on loans and usually provide that any loan agreement in violation of the statute is unenforceable

Answer 81

usury statutes

Question 82

Contract has no legal effect, null

Answer 82

Void