Midterm Flashcards
Contract
An oral or written agreement between two or more persons; that is an exchange relationship; involving at least one promise; that is enforceable
Promise
An undertaking to act or refrain from acting in a specified way, at some future time
Bilateral contract
A contract in which both parties make promises- a promise for a promise
Void
An agreement with no legal effect. As if it never existed: not enforceable
Executed contract
A contract in which all obligations have been met. Nothing further remains to be done
Unilateral contract
A contract formed when one party acts in response to another party’s promise
Express contract
A contract with significant, clear, definite, unambiguous terms stated orally or in writing
Agreement
A meeting of the minds, both parties agree.
Void able
One party has the power to invalidate the contract if they choose
Implied contract
A contract not manifested by words but gathered by implications or actions. A contract formed without express statement of terms, by words or actions
Offer
An indication of willingness to enter into a contract that is communicated to the offeree
Letter of intent
An agreement in principle, not intended to be a contract, a contract will follow
Objective theory of contracts
A theory used to determine if there was a meeting of the minds. Did the parties reach mutual assent? Would ORP Person believe a contract formed
Quantum meruit
As much as he deserved. An equitable theory for the measurement of damages to avoid unjust enrichment
Mirror image rule
In common law, acceptance must be identical to the offer. Any deviation in language from the offer will result in a counter offer.
Quasi contract
A contract that did not actually form but in in fairness the courts will enforce to avoid unjust enrichment
Counter offer
A rejection of the original offer made by the offeror by substitution of a new offer made by the original offeree
Acceptance
A manifestation of assent to the terms of the offer, made in such a manner as invited or required by the offer
Manifestation of mutual assent
The appearance that an agreement has been reached and there is a meeting of the minds between the parties.
By operation of law
An offer is terminated by events such as death of a party, illegality, passage of time, or destruction of the subject matter.
Consideration
Something promised or done that has the effect of making the agreement legally enforceable
Condition precedent
An event that must occur before the contemplated transaction/ contract is complete
Pre existing duty
A promise to do something one already has the legal obligation to do. It is also forebearing from doing something which the person is not legally entitled to do
Liquidated debt
A debt in which the amount owed is not in dispute
Forbearance
Not doing something you have the legal right to do
Accord and satisfaction
An agreement to give or accept payment that is different then that stated in the original contract
Bargained for exchange
Each party gets something not entitled to before the contract and each party gives something. It is the give and take
Illusory
The stated consideration does not really obligate the party. It only appears the party is obligated
Promissory estoppel
Theory under which a promise can be enforced despite lack of consideration because of a reliance on that promise and knowledge of that reliance
Gift
A complete transfer of property without consideration. A person receiving a gift is not obligated to do anything in return.
Legalese
Very formal, often archaic language used in a contract. Language used to impress the client
Identification clause
Can be used to identify the parties, set out addresses, dates and type of contract
Recital clause
Can be used to set out the offer and the acceptance of the parties; provide background and reasons for the contract. It is not part of the contract
Body of the contract
Used to set out the terms, conditions, obligations and responsibilities of the parties
Scriveners error
A typographical error or drafting defect
Boilerplate
Clauses in contracts that contain standard terms that can be used in all contracts as they are not adapted to the individual parties or circumstances. Language that can be used in any contract.
Self proving document
A document wherein the signature or signatures of the parties are verified and sworn to before a notary public. It can be used as evidence in court without calling in the persons who signs the document
Parol evidence rule
Applies to oral or written statements made prior to the final integrated contract that will be barred from being used as evidence as such statements or writing contradicts, changes or alters the integrated contact in some way
Merger clause
A clause in a contract that states that the document is the complete and final agreement between the parties.
Incorporated by reference
A reference to an outside document that is not part of the contract but which the parties want to make part of the contract by referencing to it
Misrepresentation
A false statement made without the intent to deceive upon which a party justifiably relies to his or her detriment
Fraud
A false statement of material fact made with the intent to deceive and upon which a party justifiably relies to his or her detriment
Puffing
Opinion. Commonly known as sales talk
Scienter
Having a guilty mind. Knowledge of the falsity
Silence as fraud
Having a duty to disclose, and knowingly concealing the truth
Duress
A wrongful threat or act that overcomes the free will of the other party
Fraud in the execution
Relates to the nature of the actual contact/agreement
Fraud in the inducement
Fraud that relates to the parties motivation in entering the contract
Intent to deceive
Knowingly. Knowledge that the statement is false and is offered to induce another party into an agreement
Justifiable reliance
The reliance upon the other party’s assertion is reasonable and to the detriment of the person so relying
Mutual mistake
All parties are mistaken as to a basic assumption of the contract
Unilateral mistake
Only one of the parties is mistaken as to a basic assumption of the contract
Basic assumption of fact
A fact that is an essential term of the contract
Undue influence
Where one party has a strong influence over the other party and abuses their position of dominance to the disadvantage of the party
Fiduciary relationship
One party is obligated to act in the best interest of another party
Unconscionable contract
A contract so unfair or so unreasonable that is shocks the conscious
Adhesion contract
A contract where all the bargaining power is concentrated in one person. It is a take it or leave it contract, an example of a an unconscionable contract
Bargaining power
The ability to negotiate, the ability to influence
Severable/ sever-ability clause
A clause that states that if a part of a contract is Unenforceable the courts may sever, edit out, the Unenforceable clause and enforce the remainder of the agreement
Cognovits
Also known as confession of judgement clauses. It is a clause that permits the immediate entry of judgement without notice or opportunity to present a defense
Indemnification clause
Where one party agrees to compensate the other party for any losses they may incur that arise from the contract
Exculpatory clause
An attempt by a party to excuse themselves from liability for their own tortious acts
Contrary to public policy
Something that is not good for society
Insurance interest
One must have a legitimate financial interest in a person to insure their life
Arms length transaction
The parties are operating under equal statue and have equal negotiating power
Moral turpitude
To act contrary to the duties which a man owes their fellow man or to society in general. It is conduct that is contrary to justice, honesty, modesty, or good morals.
