Contracts Vocab (Test 2)

Question 1

Unilateral contract

Answer 1

is a type of contract in which one party, the offeror, makes a promise or an offer that can be accepted only by the performance of an act by the other party, the offeree.

Question 2

Bilateral contract

Answer 2

is a binding agreement between two or more parties in which each party is both a promisor and a promisee.

Question 3

Executory contract

Answer 3

is a legally binding agreement between two parties who have not yet fully performed or executed their obligations. The contract specifies the responsibilities of each party and the time period for completing them. The contract may involve a lender and a borrower or a seller and a buyer

Question 4

Executed contract

Answer 4

An executed contract is a signed contract that establishes a contractual relationship between two or more parties. Once the contract is fully signed, each party agrees to uphold the legal obligations they agreed on within the written agreement.

Question 5

Void

Answer 5

is a formal agreement that does not have legal validity and is unenforceable in court.

Question 6

Voidable

Answer 6

is a formal agreement that is valid but can be declared invalid at the request of one of the parties due to some legal faults or defects in making it.

Question 7

Unenforceable

Answer 7

is a contract that cannot be accepted or enforced by a court of law because of some legal or technical defect, such as violating a statute, public policy, or a time limit.

Question 8

Objective theory of contracts

Answer 8

is a principle that determines the existence and meaning of a contract by the legal significance of the external acts of a party to a purported agreement, rather than by the actual intent of the parties.

Question 9

Offer

Answer 9

is a proposal or communication by one person to another to enter into an agreement or contract.

Question 10

Acceptance

Answer 10

is the agreement of an offer and its terms by an individual or group.

Question 11

Counteroffer

Answer 11

is an offer that is made in response to another offer and that has different or more favorable terms.

Question 12

Rejection

Answer 12

is a refusal to accept a contractual offer.

Question 13

Common law of contracts

Answer 13

a tradition-based but constantly evolving set of laws that derive primarily from past court decisions.

Question 14

Revocation

Question 15

Mirror Image Rule

Question 16

Mailbox Rule

Question 17

Consideration

Question 18

Illusory promise

Question 19

Forbearance

Question 20

Pre-existing duty

Question 21

Contractual capacity

Question 22

Minors

Question 23

Intoxicated

Question 24

Mentally incompetent

Question 25

Mutual mistake (and result on contract)

Question 26

Unilateral mistake (and result on contract)

Question 27

Undue influence

Question 28

Duress

Question 29

Misrepresentation

Question 30

Fraud

Question 31

Adhesion contract

Question 32

Exculpatory Clause

Question 33

Rescission

Question 34

Restitution

Answer 34

damages based on one party’s unfair gain, rather than the injured party’s losses. For example, it would be wrong for one party to keep a down payment if the contract is unenforceable or void. In that situation, the court would order restitution - the return - of that down payment out of fairness. If that party were allowed to keep the down payment, that would be an example of unjust enrichment.

Question 35

Reformation

Question 36

Specific performance

Answer 36

an equitable remedy imposed when the court orders a party to actually carry out their promise (e.g. deliver unique goods).

Question 37

Promissory estoppel

Answer 37

Equitable remedy created by courts to protect reliance.

Question 38

Quasi-Contract

Answer 38

are equitable contracts created by courts (also called contracts implied in law).

Question 39

Doctrine of unconscionability

Question 40

Uniform Commercial Code (UCC)

Answer 40

a body of rules created by independent legal organizations to make the law surrounding commercial transactions consistent across all fifty states and promote efficient commercial transactions across state lines. The UCC has been adopted in its entirety by nearly every state.

Question 41

What types of contracts fall under UCC Article 2

Answer 41

expressly applies to contracts for the sale of goods.
UCC 1-105: goods are tangible, movable, personal property.
Does not apply to sale of services, intangible property (stocks, intellectual property), or real estate.

Question 42

Merchant

Answer 42

are those who are regularly deal in the goods in question

Question 43

Goods

Answer 43

tangible personal property that can be physically felt or touched. For example, cars, jewelry, and clothing are goods.

Question 44

Modification contract

Question 45

Merchant’s firm offer

Question 46

Statue of Frauds…what contracts?

Question 47

Parol Evidence Rule

Question 48

Contract conditions

Question 49

Waiver

Question 50

Estoppel

Question 51

Settlement agreement

Question 52

Remedy

Answer 52

form of court enforcement of a legal right resulting from a successful civil lawsuit. fall into three general categories: legal …… (money damages), equitable …… (injunctive relief, specific performance, etc.), and declaratory judgments.

Question 53

Strict performance

Question 54

Substantial performance

Answer 54

is a defense to a breach of contract claim. But, that party might still have to pay damages for any costs the other party suffered as a result of the imperfect performance.

Question 55

Material breach

Answer 55

if the breaching party makes a serious deviation or omission that causes a substantial change in the value of the contract, that is a material breach. The injured party can sue for damages and has the right to cancel the whole contract.

Question 56

minor breach

Question 57

Compensatory damages

Answer 57

compensation awarded to the injured party to reimburse them for the loss suffered. Compensatory (actual) damages are intended to give the injured party the “benefit of their bargain”and put them in the same position they would have enjoyed if the breach had not occurred.

Question 58

Consequential damages

Answer 58

damages suffered because of the injured party’s particular circumstances. Consequential damages are sometimes called “special” damages and can include loss of anticipated profits, business, goodwill, and reputation.

Question 59

Nominal damages

Question 60

Incidental damages

Answer 60

reasonable expenses incurred by one party as the result of the other party’s breach of contract.

Question 61

Liquidated damages (liquidated damage clause)

Answer 61

agreed recovery amount in the event of a breach of the parties’ contract. The stipulated sum must relate to the actual or anticipated damages and cannot be unreasonably large (i.e. a penalty) or unconscionably small. If the liquidated damages clause cannot be enforced, the aggrieved party can still recover actual damages. Otherwise, the liquidated damages amount will often be the injured party’s only remedy.

Question 62

Privity of contract

Question 63

Third party beneficiaries – when they may have standing