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BLS Test 3
chapter 13-Intro to contracts
31
Business
Undergraduate 3
11/21/2010

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Term
contract
Definition
promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty
--legally enforceable promises
Term
consideration
Definition
bargained for exchange; what each party gets in exchange for his or her promise under the contract
Term
contractual capacity
Definition
legal ability to enter into a binding agreement
Term
legal object
Definition
contract cannot be either illegal or against public policy
Term
lack of genuine assent
Definition
offeror secures the acceptance of the agreement through improper means, such as fraud, duress, undue influence, or misrepresentation
Term
contract lacks proper form
Definition
lacks a writing
Term
objective theory of contracts
Definition
existence and interpretation of a contract is based on the outward manifestations of intent by the parties
Term
Uniform Commercial Code (UCC)
Definition
set of commercial laws that could be applicable to all states
Term
Article 2 of UCC
Definition
governs contracts for the sale (exchange for a price) of goods (tangible, movable objects)
Term
offeror
Definition
party proposing the contract
Term
offeree
Definition
person agreeing to or accepting the contract
Term
bilateral contract
Definition
a promise in exchange for a promise
Term
unilateral contract
Definition
offeror wants a performance to form the contract; offeror wants the offeree to do something not promise to do something
Term
express contracts
Definition
have all the terms clearly set forth in either written or spoken words
Term
implied contracts
Definition
arise not from words but from the conduct of the parties
Term
3 conditions that satisfy an implied-in-fact, contract
Definition
1. plaintiff provided some property or service to the defendant
2. plaintiff expected to be paid for such property or service, and a reasonable person in the position of the defendant would have expected to pay for such property or services
3. the defendant had an opportunity to reject the property or services
Term
Quasi-contracts
Definition
"implied in law contracts"; in order to prevent one party from being unjustly enriched at the expense of another, the courts impose contractual obligations on one of the parties, as if that party had entered into a contract
Term
valid contract
Definition
contains all the legal elements of a contract; one that will be enforced
Term
unenforceable contract
Definition
valid contract but there is some law that prohibits the courts from enforcing it
Term
void
Definition
not a contract at all, either its object is illegal or it has some defect that is so serious that it is not a contract
Term
voidable
Definition
one of both of the parties has the ability to either withdraw from the contract or enforce it
Term
executed
Definition
once all of the terms of the contract have been fully performed
Term
executory
Definition
some of the duties under the contract have not yet been performed
Term
formal contracts
Definition
those that have a special form or must be created in a specific manner
Term
types of formal contracts
Definition
1. contracts under seal
2. recognizances
3. letters of credit
4. negotiable instruments
Term
contract under seal
Definition
comes from when contracts were literally sealed by a piece of soft wax into which an impression was made
Term
recognizance
Definition
when a person acknowledges in court that he or she will perform some specified act or pay a price upon failure to do so; bond used as bail
Term
letter of credit
Definition
agreement by the person who issues the letter to pay a sum of money on a receipt of an invoice and other documents
Term
plain-meaning rule
Definition
states that if a writing, or a term in question, appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument, without resort to extrinsic evidence, with the words given their ordinary meaning
Term
negotiable instruments
Definition
written documents, signed by a party that makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument
Term
informal contract
Definition
"simple contract", no formalities are required in making them
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