Contracts Flashcards
Express Contract
elements of contract are laid out in specific detail.
Mailbox Rule
states that acceptance is valid once it has been posted by mail, email, or fax even if the offeror hasn’t received it or never ends up receiving it.
Mutual Assent
Two parties come to an agreement of the contract terms (aka: meeting of the minds)
Acceptance
Offeree agrees to give something of value (consideration) in exchange for goods or services
Offer
something of value which is given in exchange for something from another party
Specific Performance
ensures that the terms of the contract be performed as written
Revoke
an offeror can do this before accepting an offer
Contract Discharge
a contract is considered to be discharged when two parties have completed all terms of the contract
Unilateral Contract
an open contract where one person makes an offer (offeror) and anyone is able to accept that offer (offeree)
Bilateral Contract
a contract between two parties
Is the offeror or offerer legally bound in a unilateral contract?
offeror
Is the offeror or offerer legally bound in a bilateral contract?
both
Formal Contract
written agreement typically registered with a court which must be signed by all parties
Material Breach of Contract
one party violated the terms of the contract that significantly affects the outcome of the promise.
6 Elements of a Contract
- offer
- agreement
- consideration
- mutuality
- capacity
- legality
Informal Contract
an agreement, either written or orally, usually of a simple nature
Non-Material Breach of Contract
one party violated the terms of the contract in a minor way.
Performance
when both parties fulfill the terms of a contract.
Rescind
Revoke a contract.
Objective Theory of Contracts
states that a contract is legally binding when an offer made by one party is accepted by the other party
Objective Standard
ensures that mutual assent was present when the contract was created
Illusory Promise
a contract that lacks mutuality
Implied in fact
terms of contract not expressed but the facts are implied
Implied in law (quasi contracts)
terms of contract are not expressed but it is implied that if services are rendered, payment will be received. typically used to curve unjust enrichment
When can an offer be revoked?
Anytime by the offeror prior to acceptance
When can an offer be terminated?
- death of either party
- insanity of either party
- death or destruction of the person or thing required to perform the contract terms
- counteroffer
Prior Agreement Clause
states that one party is allowed to terminate the contract if prior plans cause the party to become unable to fulfill the terms of the contract and must be written into the contract.
Entire Agreement Clause
states that either party cannot argue that there were additional terms to the contract based on a previous agreement.
Mirror Image Rule
states that an offeree’s acceptance of terms must mirror the offeror’s terms
Revocation (Withdrawal)
when an offeror no longer intends for an offer to go forward. must be received by the offeree prior to the offeree putting their acceptance in the mail
Rejection
when an offeree does not want the offer. must be sent to the offeror prior to any acceptances that might of occurred.
Unjust Enrichment
occurs when a party receives a product/service without a contract & does not pay for it
Executed Contracts
terms of contract have been executed or completed
Executory Contracts
terms of contract are ongoing and executed over a set period of time
Promisor
party who makes the promise
Promisee
party who receives the promise
Intentional Beneficiary
Non-party receives direct benefit of a contract
Incidental Beneficiary
Non-party receives indirect benefit of a contract
Third Party Beneficiary
Non-party that directly or indirectly receives some benefit from a contract
Assent
expression of approval
Donee Beneficiary
indirectly benefits from a contract between two principal parties when one party, the promisee, attempts to give a gift
Creditor Beneficiary
receive benefits when there is a legal duty for a promise to perform
Assignment of Rights
the handing off of an existing contract’s obligations, rights, and/or benefits to another party
Assignee
receiving party
Assignor
benefiting party of a contract
Obligee
recipient of the responsibilities of the contract
Novation
occurs when a new obligor takes over the obligations of an old one
Delegee
a person who delegates the duties to another party
Essential terms of a contract
terms that must be defined in the offer & includ:
1. price
2. parties
3. time frame
4. scope of duties
Definite & Certain terms
meaning that a reasonable person is capable of readily understanding the terms
Requirements of a legally binding contract
- clear intent
- communication between the parties
- definite proposal
