Unit 9: Basic Contract Law Flashcards
A rider to a contract with additional terms or conditions.
addendum
A change to contractual terms or conditions.
amendment
The transfer to another party in writing of rights or interest in a bond, a mortgage, a lease, or another instrument.
assignment
A form of selling property where oral bids are taken and the property is sold to the highest bidder.
auction
A legally enforceable promise or set of promises between legally competent parties that must be performed for consideration. If a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
bilateral contract
The violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due.
breach of contract
Money damages awarded to the injured party to compensate them for the breach of contract but not to punish the breaching party.
compensatory damages
A defeasible fee simple estate that dictates some action or activity that the new owner must not perform. The former owner retains a right of reentry, so if the condition is broken, the former owner can take repossession of the property.
consequential damages
(1) That received by the grantor in exchange for a deed. (2) Something of value that induces a person to enter into a legally enforceable contract.
consideration
A legally enforceable promise or set of promises between legally competent parties that must be performed for consideration. If a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
contract
A new offer made in response to an offer received. It has the effect of rejecting the original offer.
counteroffer
Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
earnest money deposit
A contract in which all parties have fulfilled their promises in the contract.
executed contract
A contract under which something remains to be done by one or more of the parties.
executory contract
An oral or written contract in which the parties state the contract’s terms and express their intentions in words.
express contract
A contract under which the agreement of the parties is demonstrated by their conduct.
implied contract
The purpose of a legally enforceable contract cannot be for illegal actions or acts against public policy.
legality of object
People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legally enforceable contract.
legally competent parties
An amount predetermined by the parties to a contract as compensation to an injured party if the other party breaches the contract.
liquidated damages
A deliberate agreement between parties; offer and acceptance; “meeting of the minds.” A requirement of a legally enforceable contract.
“meeting of the minds”
A deliberate agreement between parties; offer and acceptance; “meeting of the minds.” A requirement of a legally enforceable contract.
mutual assent
Substituting a new contract for an old one or substituting new parties to an existing contract.
novation
The promise by one party to act or perform in a certain manner if the other party agrees to act or perform as requested; shows an intention to enter into a contract.
offer
The person receiving the offer is the offeree.
offeree
The person who makes the offer is the offeror.
offeror
Two essential components of a valid contract; See mutual assent and acceptance.
offer and acceptance
A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations.
parol evidence rule
If misrepresentation, fraud, mistake of fact, undue influence or duress are absent in contract formation, good contract is formed.
reality of consent
The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions. Contracts may be rescinded due to mistake, fraud, or misrepresentation. There is no need to show any money damage.
rescission
A legal action to compel a party to carry out the terms of a contract.
specific performance
A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contracts, and certain leases.
statute of frauds
That law pertaining to the period of time within which certain actions must be brought to court or be lost.
statute of limitations
A phrase in a contract that requires the performance of a certain act no later than a stated time or the noncompliant party is in breach and the contract may be voidable by the opposite party.
time is of the essence
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, a verbal contract is generally unenforceable.
unenforceable contract
A one-sided contract wherein one party makes a promise to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.
unilateral contract
A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.
valid contract
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
voidable contract
A contract that has no legal force or effect because it does not meet the essential elements of a contract.
void contract
