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CPCU 530 > CPCU 530 Ch. 2 > Flashcards

CPCU 530 Ch. 2 Flashcards

1
Q

A legally enforceable agreement between two or more parties in which each party makes some promise to the other

A

Contract

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2
Q

The party to a contract making a prmise

A

Promisor

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3
Q

The party to a contract to whom a promise is made

A

Promisee

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4
Q

The relationship that exists between the parties to a contract

A

Privity of contract

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5
Q

A person who is not a party to a contract but who benefits from it and has a legal right to enforce the contract if it is breached by either of the contracting parties

A

Third-party beneficiary

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6
Q

The failure, without legal excuse, to fulfill a contractual promise

A

Breach of contract

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7
Q

A contract in which each party promises a performance

A

Bilateral contract

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8
Q

A contract in which only one party makes a promise or undertakes the requested performance

A

Unilateral contract

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9
Q

A contract that has been completely performed by both parties

A

Executed contract

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10
Q

A contract that has not been completely performed by one or both of the parties

A

Executory contract

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11
Q

A contract whose terms and intentions are explicitly stated

A

Express contract

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12
Q

A contract whose terms and intentions are indicated by the actions of the parties to the contract and the surronding circumstances

A

Implied contract

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13
Q

A contract that is not express but that the parties presumably intended, either by tactic understanding or by the assumption that it existed

A

Implied-in-fact contract

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14
Q

An obligation that is not an actual contract but that is imposed by law because of the parties’ conduct or some special relationship between them or because one of them would otherwise be unjustly enriched

A

Implied in law contract

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15
Q

A contract that one of the parties can reject (avoid) based on some circumstances surrounded its execution

A

Voidable contract

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16
Q

An agreement that, despite the parties’ intentions, never reaches contract status and is therefore not legally enforceable or binding

A

Void contract

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17
Q

A promise that requires some action by the intended recipient to make an agreement

A

Offer

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18
Q

The party to a contract who promises to give something in return a promise or an act by another party

A

Offeror

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19
Q

The party to a contract who makes a promise or acts in return for something offered by another party

A

Offeree

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20
Q

A proposal an offeree makes to an offeror that varies in some material way from the original offer, resulting in rejection of the original offer and constituting a new offer

A

Counteroffer

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21
Q

The assent to an offer that occurs when the party to whom an offer has been made either agrees to the proposal or does what has been proposed

A

Acceptance

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22
Q

The act of giving up or the promise, necessary terms of an agreement

A

Forbearance

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23
Q

The performance of the primary, necessary terms of an agreement

A

Substantive performance

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24
Q

A party to a contract who has the basic or minimal ability to do something about the mental ability to understand problems and make decision

A

Competent party

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25
Q

The return of specific property by court order

A

Restitution

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26
Q

Something of value or bargained for and exchanged by the parties to a contract

A

Consideration

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27
Q

Consideration based on natural love or affection, or on moral duty, that is not sufficient to support contract

A

Good consideration

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28
Q

The consideration necessary and sufficient to support a valid contract

A

Valuable consideration

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29
Q

A promise no supported by valuable consideration and, therefore, not binding

A

Gratuitous promise

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30
Q

An agreement (accord) to substitute performance other than that required in a contract and the carrying out of that agreement (satisfaction)

A

Accord and satisfaction

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31
Q

A legal principle that permits enforcement of a promise made without consideration in order to prevent injustice

A

Promissory estoppel

32
Q

An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred

A

Insurable interest

33
Q

The charging of an illegally high rate of interest on a loan

A

Usury

34
Q

The failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming othera

A

Negligence

35
Q

A contractual provision purporting excuse of a party from liability resulting from negligence or an otherwise wrongful act

A

Exculpatory clause (exculpatory agreement)

36
Q

An agreement between an employer (the principle) and an employee (the agent) to protect the employer’s customer, trade secrets, confidential information, and other items for a specific period after an employee relationship has been terminated

A

Noncomplete agreement

37
Q

An illegal transaction in which both parties are equally at fault

A

In pari delicto agreement

38
Q

A contract that includes two or more promises, each of which a court can enforce separately

A

Severable contract

39
Q

Contracting parties actual assent to form a contract or their indication of intent to contract by their actions and words

A

Genuine assent

40
Q

An intentional misrepresentation resulting in harm to a person or an organization

A

Fault

41
Q

A statement of fact or opinion made by the insured when applying for insurance, usually in response to a question from the insurer

A

Representation

42
Q

In insurance, a fact that would affect the insurer’s decision to provide or maintain insurance or to settle a claim

A

Material fact

43
Q

A legal action that voids a principle’s bid

A

Rescission

44
Q

A perception that does not agree with the facts

A

Mistake

45
Q

A perception by one party to a contract that does not agree with the facts

A

Unilateral mistake

46
Q

A perception by both parties to a contract that does not agree with the facts

A

Bilateral mistake

47
Q

The use of restraint, violence, or threats of violence to compel a party to act contrary to his or her wishes or interests

A

Duress

48
Q

The improper use of power or trust to deprive a person of free will and substitute another’s objective, resulting in lack of genuine assent to a contract

A

Undue influence

49
Q

A law to prevent fraud and perjury by requiring that certain contracts be in writing and contain the signature of the party responsible for performing that contract

A

Statue of frauds

50
Q

Tangible property consisting of land, all structures permanently attached to land, and whatever is growing on the land

A

Real property (realty)

51
Q

A model code that has been adopted in whole or in part by each state and whose purpose is to provide a consistent legal basis for business transactions throughout the US and its territories

A

Uniform Commercial Code (UCC)

52
Q

An event that must occur before a duty of performance arises in a contract

A

Condition precedent

53
Q

A rule of evidence that limits the terms of a contract evidenced by a writing to those expressed in writing

A

Parol evidence rule

54
Q

The transfer of rights or a property

A

Assignment

55
Q

The party to a contract who makes an assignment

A

Assignor

56
Q

The individual or entity to whom property, rights, or interests have been transferred

A

Assignee

57
Q

A contract between two parties that benefits a third party

A

Third party beneficiary contract

58
Q

A third party beneficiary owed a debt that is to be satisfied by performance of a contract

A

Creditor beneficiary

59
Q

A third party beneficiary who receives the benefits of a contract’s performance as a gift from the promisee, with the intent of the contracting parties

A

Donee beneficiary

60
Q

A third party beneficiary who has no contractual rights but benefits from a contract even though that is not the intent of the parties to the contract

A

Incidental beneficiary

61
Q

An offer to perform one’s duties under a contract

A

Tender

62
Q

The substitution of a third party for one of the original parties to a contract, releasing the original party from rights and obligations under the contract

A

Novation

63
Q

An event that must occur at the same time as another condition in a contract

A

Condition concurrent

64
Q

An event that, if it occurs, discharges a duty of performance in a contract

A

Condition subsequent

65
Q

A party’s refusal to meet obligation under a contract

A

Repudiation

66
Q

A party’s unequivocal indication before contract performance is due that he or she will not perform when performance is due

A

Anticipatory breach

67
Q

Violation of the agreement that would justify an owner’s termination of contract

A

Material breach of contract

68
Q

A payment awarded by a court to reimburse a victim for actual harm

A

Compensatory damages

69
Q

A payment awarded by a court to indemnify an injured party for losses that result indirectly from a wrong such as a breach of contract or a tort

A

Consequential damages

70
Q

A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party’s actual damages

A

Punitive damages (exemplary damages)

71
Q

An intentional or reckless act, extreme or outrageous in nature, causing severe emotional distress that results in physical injury; generally applied in suits for breach of insurance contracts

A

Bad faith (outrage)

72
Q

A payment awarded by a court that exceeds the usual contract damages for a breach of contract

A

Extra contractual damages

73
Q

A duty owned by an injured party to a claim to take reasonable measures to minimize or avoid additional injury or loss

A

Mitigation of damages

74
Q

A reasonable estimation of actual damages, agreed to by contracting parties and included in the contract, to be paid in the event of a breach or for negligence

A

Liquidated damages

75
Q

A court ordered equitable remedy requiring a party to perform a certain act, often but not always, as a result of a breach of contract

A

Specific performance

76
Q

A court-ordered equitable remedy requiring a party to act or refrain from acting

A

Injunction

CPCU 530 (10 decks)

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