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Flashcards in Contracts Deck (24):
1

acceptance

expression to enter a contract based on the terms of the offer - when an offeree agrees to offeror's terms

offer must be accepted only by person to whom it was directed

wording must match that in offer (usually)

valid when sent

2

Capacity

mental capacity to understand the nature and terms of the contract

3

Compensatory damages

most common remedy for breach of contract. designed to pay the nonbreaching party for the amount of loss that has been suffered.

4

Contract

promises that the court will enforce

Elements: 1. Offer 2. Acceptance 3. Consideration 4. Legal capacity 5. Legality

Types: 1. Express (specifically stated) 2. Implied 3. Executed (fulfilled) 4. Executory (terms not fully performed) 5. Unilateral (one party may choose whether or not to perform) 6. Bilateral 7. Voidable 8. Void

5

Formation defenses

actions that invalidate what otherwise would be mutual assent (duress, fraud, mistake, undue influence).

6

Minor

person younger than the legal age to enter a binding contract. a minor's contract is voidable by the minor

7

Mirror Image Rule

an acceptance must precisely reflect the offer to be a valid acceptance

8

Mitigation of damages

nonbreaching party has the obligation to keep losses as low as possible

9

Mutual assent

parties have voluntarily come to a common understanding of the terms of the bargain. combination of a valid offer and valid acception

10

offer

expression of party's willingness to enter into a contract (valid when received)

A. Intent: objective (reasonable) standard, subjective intent  or promises made in jest are not considered

B. Definite and/or Certain: sufficient specific terms so both parties know what their obligations are

C. Communicated: offer is effective as transmitted (mistakes in transmission are offerers' risk

 

11

Parol evidence rule

prevents introduction of evidence that contradicts the language of a written contract

12

Promissory estoppel

implied contract at law, where a court rules that a contract exists even though an element of the contract is missing

13

Specific performance

a remedy that is available where money damages would not be adequate to compensate the nonbreaching party. (breaching party must perform the original promise under contract)

14

Statute of Frauds

Requires certain contracts be in writing or have written evidence to support the contracts' existence (real estate transactions, contracts that cannot be performed in under one year, answer for debts of another party, sales of goods for $500 or more)

Contract must be signed by the party charged (party we are seeking to hold liable)

Part performance typically satisfies Statue of Frauds

Exceptions: specially manufactured goods, if a party admits contract agreement in court, goods that have been paid for or accepted

15

Void

contracts not enforceable by law

16

Voidable

contracts are valid unless the party, with option to do so, chooses to make the contract void

17

Unilateral Contract

One party gives promise for completion of requested act

No legal oblication unless promisee undertakes the action

18

Option

offer supported by consideration and cannot be revoked before state time

19

Modification

Common law requires new consideration on both sides of a modified contract

UCC does not require new consideration from both parties, if modification is made in good faith

UCC requires modification in writing for goods over $500

UCC requires writen agreements for sale of intangibles over $5,000

20

Accord

Agreement to subsitute new performance for the original performance

21

Unilateral

unilateral offer: when an offeror expects acceptance of an offer by action of the offeree

unilateral contract: when oferee accepts the contract through performance of the offeror's required action

22

Quasi contract

implied-in-law agreement resulting when one party has been unjustly enriched at the expense of another. Law creates such contract when there is no binding agreement present to keep the unjust enrichment from occuring.

23

Terminiation

By offeror action: Revocation

By offeree action: Rejection, Counteroffer

By operation of law: Death, incapacity, destruction of subject matter, illegal activities

24

Assignment

transfer of a right under contract

Delegation: transfer of duties

Assignment of a contract is generally taken to mean both assignment of rights and delegation of duties