Vocabulary Study Cards Ch. 9

Question 1

Consideration

Answer 1

Anything of value offered as an inducement to contract, such as money, action, or forbearance, under the law.

Question 2

Express Contract

Answer 2

A contract that is implied from the conduct and actions of the parties.

Question 3

Bilateral Contract

Answer 3

One that is based on mutual exchange of promises or acts between the parties at the time the contract is signed. A promise in exchange for the promise of another.

Question 4

Ready, Willing, and Able

Answer 4

A buyer who is ready to buy, willing to buy, and financially able to pay the asking price.

Question 5

Implied Contract

Answer 5

A contract that is implied from the conduct and actions of the parties.

Question 6

Unilateral Contract

Answer 6

When one party makes a promise to the other and the second party returns an action in response to the promise.

Question 7

Executed Contract

Answer 7

A contract that has been fully performed by the parties.

Question 8

Executory Contracts

Answer 8

All contracts that have not been fully performed because things still need to be done as required by the contract.

Question 9

Valid Contract

Answer 9

A contract that is binding and enforceable. Means “good and enforceable” as opposed to whether it represents a good deal.

Question 10

Voidable Contract

Answer 10

Results from failure to meet some legal requirement in negotiating the agreement.

Question 11

Void Contract

Answer 11

An agreement that is absolutely unenforceable and has no legal force or effect.

Question 12

Mutual Assent

Answer 12

The voluntarily agreement of all parties to a contract as evidenced by an offer and acceptance.

Question 13

Offeror

Answer 13

The party making an offer.

Question 14

Offeree

Answer 14

Party to whom the offer is made.

Question 15

Illusory Offer

Answer 15

One that does not obligate the offeror.

Question 16

Counteroffer

Answer 16

A rejection coupled with a new offer.

Question 17

Earnest Money

Answer 17

Money the buyer deposits with the offer to purchase to show that the buyer is earnest, or sincere, in the intent to purchase the property.

Question 18

Contractual Capacity

Answer 18

Having the ability to understand the terms of a contract and the consequences of nonperformance.

Question 19

Negligent Misrepresentation

Answer 19

Occurs as a result of misconception as to the facts on the part of the person making the unintentional misrepresentation.

Question 20

Duress

Answer 20

The inability of a party to exercise his or her free will because of fear of another party.

Question 21

Land Contracts

Answer 21

Contracts for deed, installment contracts, and conditional sale contracts.

Question 22

Accord and Satisfaction

Answer 22

A settlement agreement between the parties, often in the form of some compromise, that annuls and discharges the original agreement.

Question 23

Novation

Answer 23

The substitution of a new contract for a prior contract.

Question 24

Full Performance

Answer 24

The usual matter of terminating contracts when all the terms of the contract have been fully performed by all parties, the contract is executed and terminated.

Question 25

Breach of Contract

Answer 25

Failure, without legal excuse, to perform any promise that forms the whole or part of a contract.

Question 26

Assignment

Answer 26

The transfer of legal rights and obligations by one party to another.

Question 27

Parol Evidence Rule

Answer 27

Rule of evidence and law that states the written words contain all of the agreement and that oral statements not agreeing with the written word are to be disregarded.

Question 28

Compensatory Damages

Answer 28

The injured party is entitled to receive compensation for any financial loss cause by the breach as may be awarded by a court.

Question 29

Liquidated Damages

Answer 29

The amount of money for damages is agreed upon in the contract.