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Business Law
Busa 303 Test 2
45
Business
Undergraduate 3
03/21/2010

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Term
Promise
Definition
person’s assurance that the person will or will not do something
Term
Contract law
Definition
Contracts relating to services, real estate, employment, and insurance, for example, generally are governed by the common law of contracts
Term
Contracts for the sale and lease of goods, however, are governed by
Definition
the UCC
Term
Contract law deals with
Definition
among other things, the formation and enforcement of agreements between parties
 Pacta sunt servanda- “agreements shall be kept”
o Necessary to ensure compliance with a promise or to entitle the innocent party to some form of relief
Term
Contract (general definition)
Definition
“a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as duty”
Term
Contract (Offical definition)
Definition
Legally binding agreement between two or more parties who agree to perform or to refrain from performing some act now or in the future
Term
Requirements of a Valid contract
Definition
Agreement, Consideration, Contractual capacity, and Legality
Term
Consideration
Definition
Something to convince a person to make a deal
Term
Contractual capacity
Definition
Must be recognized as possessing characteristics that qualify them as competent parties
Term
Legality
Definition
Contract’s purpose must be to accomplish some goal that is legal and not against public policy
Term
Defenses to the Enforceability of Contract
Definition
Genuineness of assent - Consent must genuine & Form - Must be a from the law requires
Term
bilateral contract
Definition
A type of contract that arises when a promise is given in exchange for a return promise
Term
quantum meruit
Definition
(pronounced kwahn-tuhm mehr-oo-wuht) Literally, as much as he deserves—an expression describing the extent of liability on a contract implied in law (quasi contract). An equitable doctrine based on the concept that one who benefits from another's labor and materials should not be unjustly enriched thereby but should be required to pay a reasonable amount for the benefits received, even absent a contract
Term
executed contract
Definition
A contract that has been completely performed by both parties.
Term
executory contract
Definition
A contract that has not as yet been fully performed
Term
express contract
Definition
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
Term
formal contract
Definition
A contract that by law requires a specific form, such as being executed under seal, to be valid
Term
implied-in-fact contract
Definition
A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract).
Term
informal contract
Definition
A contract that does not require a specified form or formality in order to be valid.
Term
objective theory of contracts
Definition
A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into the contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.
Term
quasi contract
Definition
A fictional contract imposed on parties by a court in the interests of fairness and justice; usually, quasi contracts are imposed to avoid the unjust enrichment of one party at the expense of another.
Term
unenforceable contract
Definition
A valid contract rendered unenforceable by some statute or law.
Term
unilateral contract
Definition
A contract that results when an offer can only be accepted by the offeree's performance
Term
valid contract
Definition
A contract that results when elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present.
Term
void contract
Definition
A contract having no legal force or binding effect
Term
voidable contract
Definition
A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties
Term
acceptance
Definition
(1) In contract law, the offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal. Although historically the terms of acceptance had to be the mirror image of the terms of the offer, the Uniform Commercial Code provides that even modified terms of the offer in a definite expression of acceptance constitute a contract. (2) In negotiable instruments law, the drawee's signed agreement to pay a draft when presented.
Term
agreement
Definition
A meeting of two or more minds in regard to the terms of a contract; usually broken down into two eventsan offer by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made.
Term
counteroffer
Definition
An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.
Term
estop
Definition
To bar, impede, or preclude.
Term
mailbox rule
Definition
A rule providing that an acceptance of an offer becomes effective on dispatch (on being placed in a mailbox), if mail is, expressly or impliedly, an authorized means of communication of acceptance to the offeror.
Term
mirror image rule
Definition
A common law rule that requires, for a valid contractual agreement, that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer.
Term
mutual assent
Definition
The element of agreement in the formation of a contract. The manifestation of contract parties' mutual assent to the same bargain is required to establish a contract.
Term
offer
Definition
A promise or commitment to perform or refrain from performing some specified act in the future
Term
option contract
Definition
A contract under which the offeror cannot revoke his or her offer for a stipulated time period and the offeree can accept or reject the offer during this period without fear that the offer will be made to another person. The offeree must give consideration for the option (the irrevocable offer) to be enforceable.
Term
promissory estoppel
Definition
A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise.
Term
revocation
Definition
In contract law, the withdrawal of an offer by an offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability.
Term
in pari delicto
Definition
At equal fault.
Term
adhesion contract
Definition
A standard-form contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.
Term
age of majority
Definition
The age at which an individual is considered legally capable of conducting himself or herself responsibly. A person of this age is entitled to the full rights of citizenship, including the right to vote in elections. In contract law, one who is no longer an infant and can no longer disaffirm a contract.
Term
blue laws
Definition
State or local laws that prohibit the performance of certain types of commercial activities on Sunday
Term
contractual capacity
Definition
The threshold mental capacity required by the law for a party who enters into a contract to be bound by that contract.
Term
scienter (pronounced sy-en-ter)
Definition
Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.
Term
innocent misrepresentation
Definition
A false statement of fact or an act made in good faith that deceives and causes harm or injury to another
Term
negligent misrepresentation
Definition
Any manifestation through words or conduct that amounts to an untrue statement of fact made in circumstances in which a reasonable and prudent person would not have done (or failed to do) that which led to the misrepresentation. A representation made with an honest belief in its truth may still be negligent due to (1) a lack of reasonable care in ascertaining the facts, (2) the manner of expression, or (3) the absence of the skill or competence required by a particular business or profession.
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