Term
| legally enforceable contract |
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Definition
| a contract in which if one party fails to perform as promised, the other party can use the court system to enforce the contract and recover damages or other remedy |
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Term
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Definition
| the party who makes an offer to enter into a contract |
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Term
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Definition
| the party to whom an offer to enter into a contract is made |
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Term
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Definition
| contract law developed primarily by state courts |
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Term
| Uniform Commercial Code (UCC) |
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Definition
| a comprehensive statutory scheme that includes laws that cover aspects of commercial transactions |
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Term
| Restatement of the Law of Contracts |
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Definition
| a compilation of model contract law principles drafted by legal scholars. This is not a law |
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Term
| objective theory of contracts |
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Definition
| a theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties |
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Term
| electronic commerce (e-commerce) |
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Definition
| the sale and lease of goods and services and other property and the licensing of software over the Internet or by other electronic means |
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Term
| electronic contract (e-contract) |
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Definition
| a contract that is formed electronically |
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Term
| Uniform Computer Information Transactions Act (UCITA) |
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Definition
| a model act that establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses |
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Term
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Definition
| a contract entered into by way of exchange of promises of the parties; "a promise for a promise" |
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Term
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Definition
| a contract in which the offeror's offer can be accepted only by the performance of an act by the offeree; "a promise for an act" |
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Term
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Definition
| a contract that requires a special form or method of creation |
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Term
| informal contract (simple contract) |
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Definition
| a contract that is not formal. valid informal contracts are fully enforceable and may be sued upon if breached |
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Term
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Definition
| a contract that meets all the essential elements to establish a contract; a contract that is enforceable by at least one of the parties |
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Term
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Definition
| a contract that has no legal effect; a nullity |
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Term
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Definition
| a contract in which one or both parties have the option to void their contractual obligations. if a contract is voided, both parties are released from their contractual obligations |
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Term
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Definition
| a contract in which the essential elements to create a valid contract are met but there is some legal defense to the enforcement of the contract |
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Term
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Definition
| a contract that has been fully performed on both sides; a completed contract |
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Term
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Definition
| a contract that has not been fully performed by either or both sides |
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Term
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Definition
| an agreement that is expressed in written or oral words |
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Term
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Definition
| a contract in which agreement between parties has been inferred from their conduct |
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Term
| quasi-contract (implied-in-law contract) |
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Definition
| an equitable doctrine whereby a court may award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed. the doctrine is intended to prevent unjust enrichment and unjust detriment |
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Term
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Definition
| a doctrine that permits judges to make decisions based on fairness, equality, moral rights, and natural law |
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Term
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Definition
| the manifestation by two or more persons of the substance of a contract |
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Term
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Definition
| the party who makes an offer |
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Term
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Definition
| the party to whom an offer has been made |
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Term
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Definition
| "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it" |
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Term
| objective theory of contracts |
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Definition
| a theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties |
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Term
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Definition
| a term in a contract that can reasonably be supplied by the courts |
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Term
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Definition
| an invitation to make an offer or an actual offer |
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Term
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Definition
| an award given for performance of some service or attainment. To collect a reward, the offeree must (1) have knowledge of the reward offer prior to completing the requested act and (2) perform the requested act. |
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Term
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Definition
| an auction in which the seller retains the right to refuse the highest bid and withdraw the goods from sale. Unless expressly stated otherwise, an auction is an auction with reserve |
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Term
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Definition
| an acution in which the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid |
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Term
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Definition
| withdrawal of an offer by the offeror that terminates the offer |
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Term
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Definition
| express words or conduct by the offeree to reject an offer; terminates the offer |
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Term
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Definition
| a response by an offeree that contains terms and conditions different from or in addition to those of the offer; terminates previous offer |
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Term
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Definition
| the enactment of a statute, regulation, or court decision that makes the object of an offer illegal; terminates the offer |
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Term
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Definition
| a stated time period after which an offer terminates; if no time is stated offer terminates after a reasonable time |
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Term
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Definition
| "a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts" |
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Term
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Definition
| a rule which states that for an acceptance to exist, the offeree must accept the terms as stated in the offer |
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Term
| acceptance-upon-dispatch rule (mailbox rule) |
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Definition
| a rule which states that an acceptance is effective when it is dispatched, even if it is lost in transmission |
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Term
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Definition
| the proper addressing, packaging, and posting of an acceptance |
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Term
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Definition
| a mode of acceptance that is implied from what is customary in similar transactions, usage of trade, or prior dealings between the parties |
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Term
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Definition
| a stipulation in an offer that says the acceptance must by a specified means of communication |
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Term
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Definition
| something of legal value given in exchange for a promise |
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Term
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Definition
| support for a contract when either (1) the promisee suffers a legal detriment or (2) the promisor receives a legal benefit |
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Term
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Definition
| exchange that parties engage in that leads to an enforceable contract |
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Term
| gift promise (gratuitous promise) |
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Definition
| a promise that is unenforceable because it lacks consideration |
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Term
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Definition
| a promise to refrain from doing an illegal act; a promise will not support a contract |
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Term
| illusory promise (illusory contract) |
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Definition
| a contract into which both parties enter but in which one or both of the parties can choose not to perform their contractual obligations; no consideration |
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Term
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Definition
| something a person is already under an obligation to do. a promise lacks consideration if a person promises to perform a preexisting duty |
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Term
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Definition
| a prior act or performance; past consideration will not support a new contract; new consideration must be made |
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Term
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Definition
| a contract in which a seller agrees to sell all of its production to a single buyer |
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Term
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Definition
| a contract in which a buyer agrees to purchase all of its requirements for an item from one seller |
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Term
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Definition
| a contract which contains a clause that requires one or both of the parties to use their best efforts to achieve the objective of the contract |
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Term
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Definition
| an agreement whereby the parties agree to accept something different in satisfaction of the original contract |
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Term
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Definition
| the performance of an accord |
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Term
| promissory estoppel (detrimental reliance) |
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Definition
| an equitable doctrine that prevents the withdrawl of a promise by a promisor if it will adversely affect a promisee who has adjusted his or her position in justifiable reliance on the promise |
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Term
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Definition
| a person who has not reached the age of majority (females under 18; males under 21) |
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Term
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Definition
| a doctrine that allows minors to disaffirm (cancel) most contracts they have entered into with adults |
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Term
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Definition
| the act of a minor to rescind a contract under the infancy doctrine. disaffirmance may be done orally, in writing, or by the minor's conduct |
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Term
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Definition
| a rule that states that a minor is obligated only to return the goods or property he or she has received from the adult in the condition it is in at the time of disaffirmance |
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Term
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Definition
| a rule that states that if a minor has transferred money, property, or other valuables to the competent party before disaffirming the contract, that party must place the minor in status quo |
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Term
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Definition
| the act of a minor after the minor has reached the age of majority by which he or she accepts a contract entered into when he or she was a minor |
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Term
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Definition
| the act or process of a minor voluntarily leaving home and living apart from his or her parents |
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Term
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Definition
| food, clothing, shelter, medical care, and other items considered necessary to the maintenance of life. minors must pay the reasonable value of necessaries of life for which they contract |
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Term
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Definition
| a state of contractual incapacity, as determined by law |
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Term
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Definition
| declared legally insane by a proper court or administrative agency. a contract entered into by a person adjudged insane is void |
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Term
| insane but not adjudged insane |
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Definition
| being insane but not having been adjudged insane by a court or an administrative agency. a contract entered into by such person is generally voidable. some states hold that such a contract is void |
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Term
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Definition
| a person who is under contractual incapacity because of ingestion of alcohol or drugs to the point of incompetence |
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Term
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Definition
| a contract that has a lawful object |
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Term
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Definition
| a contract that has an illegal object. void |
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Term
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Definition
| a law that sets an upper limit on the interest rate that can be charged on certain types of loans |
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Term
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Definition
| statues that make certain forms of gambling illegal |
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Term
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Definition
| a doctrine that states that the courts will refuse to enforce or rescind an illegal contract and will leave the parties where it finds them |
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Term
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Definition
| a situation in which both parties are equally at fault in an illegal contract |
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Term
| contract contrary to public policy |
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Definition
| a contract that has a negative impact on society or that interferes with the public's safety and welfare |
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Term
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Definition
| a contract whose objective is the commission of an act that society considers immoral |
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Term
| contract in restraint of trade |
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Definition
| a contract that unreasonably restrains trade |
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Term
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Definition
| a statute that requires a person or business to obtain a license from the government prior to engaging in a specified occupation or activity |
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Term
| regulatory licensing statute |
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Definition
| a licensing statute enacted to protect the public |
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Term
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Definition
| a licensing statute with the primary purpose of raising revenue for the government |
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Term
| exculpatory clause (release of liability clause) |
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Definition
| a contractual provision that relieves one (or both) of the parties to a contract from tort liability for ordinary negligence |
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Term
| covenant not to compete (noncompete clause) |
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Definition
| a contract that provides that a seller of a business or an employee will not engage in a similar business or occupation within a specified geographical area for a specified time following the sale of a business or termination of employment |
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Term
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Definition
| a contract that courts refuse to enforce in part or at all because it is so oppressive or manifestly unfair as to be unjust |
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Term
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Definition
| the state of two specified parties being in a contract |
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Term
| assignment of rights (assignment) |
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Definition
| the transfer of contractual rights by an obligee to another party |
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Term
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Definition
| an obligee who transfers a right |
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Term
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Definition
| a party to whom a right has been transferred |
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Term
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Definition
| a clause that prohibits the assignment of rights under the contract |
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Term
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Definition
| a transfer of contractual duties by an obligor to another party for performance |
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Term
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Definition
| an obligor who has transferred his or her duty |
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Term
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Definition
| a party to whom a duty has been transferred |
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Term
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Definition
| a situation in which a delegation of duties contains the term assumption, I assume the duties, or other similar language. in such a case, the delegatee is legally liable to the obligee for nonperformance |
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Term
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Definition
| a clause that prohibits the delegation of duties under the contract |
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Term
| intended third-party beneficiary |
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Definition
| a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor |
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Term
| donee beneficiary contract |
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Definition
| a contract entered into with the intent to confer a benefit or gift on an intended third party |
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Term
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Definition
| a third party on whom a benefit is to be conferred |
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Term
| creditor beneficiary contract |
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Definition
| a contract that arises in the following situation: (1) a debtor borrows money, (2) the debtor signs an agreement to pay back the money plus interest, (3) the debtor sells the item to a third party before the loan is paid off, and (4) the third party promises the debtor that he or she will pay the remainder of the loan to the creditor |
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Term
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Definition
| an original creditor who becomes a beneficiary under the debtor's new contract with another party |
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Term
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Definition
| a party who is unintentionally benefited by other people's contracts |
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Term
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Definition
| an unconditional promise to perform |
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Term
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Definition
| a qualification of a promise that becomes a covenant if it is met |
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Term
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Definition
| a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract |
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Term
| personal satisfaction test |
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Definition
| a subjective test that applies to contracts involving personal taste & comfort |
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Term
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Definition
| an objective test that applies to commercial contracts and contracts involving mechanical fitness |
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Term
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Definition
| a condition whose occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform |
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Term
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Definition
| a condition that exists when the parties to a contract must render performance simultaneously; each party's absolute duty to perform is conditioned on the other party's absolute duty to perform |
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Term
| implied-in-fact condition |
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Definition
| a condition that can be implied from the circumstances surrounding a contract and the parties' conduct |
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Term
| novation agreement (novation) |
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Definition
| an agreement that substitutes a new party for one of the original contracting parties and relieves the exiting party of liability on the contract |
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Term
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Definition
| the settlement of a contract dispute |
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Term
| impossibility of performance (objective impossibility) |
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Definition
| nonperformance that is excused if a contract becomes impossible to perform |
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Term
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Definition
| a clause in a contract in which the parties specify certain events that will excuse nonperformance |
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Term
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Definition
| a statute that establishes the time period during which a lawsuit must be brought; if the lawsuit is not brought within this period, the injured party loses the right to sue |
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Term
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Definition
| a situation that occurs if one or both of the parties do not perform their duties as specified in the contract |
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Term
| complete performance (strict performance) |
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Definition
| a situation in which a party to a contract redners performance exactly as required by the contract. Complete performance discharges that party's obligations under the contract |
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Term
| tender of performance (tender) |
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Definition
| an unconditional and absolute offer by a contracting party to perform his or her obligations under a contract |
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Term
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Definition
| performance by a contracting party that deviates only slightly from complete performance |
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Term
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Definition
| a breach that occurs when a party renders substantial performance of his or her contractual duties |
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Term
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Definition
| a breach that occurs when a party renders inferior performance of his or her contractual duties |
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Term
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Definition
| a situation in which a party fails to perform express or implied contractual obligations and impairs or destroys the essence of a contract |
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Term
| anticipatory breach (anticipatory repudiation) |
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Definition
| a breach that occurs when one contracting party informs the other that he or she will not perform his or her contractual duties when due |
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Term
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Definition
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Term
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Definition
| an award of money intended to compensate a nonbreaching party for the loss of the bargain |
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Term
| consequential damages (special damages) |
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Definition
| foreseeable damages that arise from circumstances outside a contract. to be liable for these damages, the breaching party must know or have reason to know that the breach will cause special damages to the other party |
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Term
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Definition
| damages awarded when the nonbreaching party sues the breaching party even though no financial loss has resulted from the breach |
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Term
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Definition
| a nonbreaching party's legal duty to avoid or reduce damages caused by a breach of contract |
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Term
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Definition
| damages that parties to a contract agree in advance should be paid if the contract is breached |
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Term
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Definition
| an action to rescind (undo) a contract; only available when there has been a material breach of contract, fraud, duress, undue influence, or mistake |
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Term
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Definition
| the return of goods or property received from the other party to rescind a contract; cash equivalent is available if can't be done another way |
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Term
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Definition
| an order of the court that enables a government officer to seize property of the breaching party and sell it at auction to satisfy a judgment |
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Term
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Definition
| an order of the court that orders that wages, bank accounts, or other property of the breaching party held by third persons be paid to the nonbreaching party to satisfy a judgment |
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Term
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Definition
| a remedy that is available if there has been a breach of contract that cannot be adequately compensated through a legal remedy or to prevent unjust enrichment |
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Term
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Definition
| a remedy that orders the breaching party to perform the acts promised in the contract; usually awarded in cases in which the subject matter is unique, involving land, heirlooms, and paintings |
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Term
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Definition
| an equitable doctrine that permits the court to rewrite a contract to express the parties' true intentions |
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Term
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Definition
| a court order that prohibits a person from doing a certain act |
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Term
| intentional interference with contractual relations |
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Definition
| a tort that arises when a third party induces a contracting party to breach the contract with another party |
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Term
| covenant of good faith & fair dealing |
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Definition
| an implied covenant under which the parties to a contract not only are held to the express terms of the contract but are also required to act in "good faith" and deal fairly in all respects in obtaining the objective of the contract |
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Term
| Uniform Commercial Code (UCC) |
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Definition
| a model act that includes comprehensive laws that cover most aspects of commercial transactions |
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Term
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Definition
| an article of the UCC that governs the sale of goods |
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Term
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Definition
| the passing of title of goods from a seller to a buyer for a price |
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Term
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Definition
| tangible things that are movable at the time of their identification to a contract |
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Term
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Definition
| a sale that involves the provision of a service and a good in the same transaction |
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Term
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Definition
| a person who (1) deals in the goods of the kind involved in a transaction or (2) by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the goods involved in the transaction |
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Term
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Definition
| an article of the UCC that governs leases of goods |
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Term
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Definition
| a transfer of the right to hte possession and use of named goods for a set term in return for certain consideration |
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Term
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Definition
| a person who transfers the right of possession and use of goods under a lease |
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Term
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Definition
| a person who acquires the right to possession and use of goods under a lease |
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Term
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Definition
| a three-party transaction consisting of a lessor, a lessee, and a supplier |
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Term
| Revised Article 2 (sales) |
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Definition
| a revision of UCC Article 2 (sales) that includes provisions that recognize changes in the commercial environment and the importance of electronic sales contracts. |
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Term
| Revised Article 2A (leases) |
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Definition
| a revision of UCC Article 2A (Leases) that includes provisions that recognize changes in the commercial environment and the importance of electronic lease contracts |
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Term
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Definition
| a rule that says an open term can be "read into" a contract |
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Term
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Definition
| a UCC rule that says that a merchant who (1) makes an offer to buy, sell, or lease goods and (2) assures the other party in a separate writing that the offer will be held open cannot revoke the offer for the time stated or, if no time is stated, for a reasonable time |
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Term
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Definition
| in certain circumstances, the UCC permits an acceptance of a sales contract to contain additional terms and still to act as an acceptance rather than a counteroffer |
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Term
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Definition
| a shipment that is offered to a buyer as a replacement for the original shipment when the original shipment cannot be filled |
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Term
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Definition
| a rule in the UCC that requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing |
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Term
| written confirmation rule |
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Definition
| a rule that provides that if both parties to an oral sales or lease contract are merchants, the Statute of Frauds writing requirement can be satisfied if (1) one of the parties to an oral agreement sends a written confirmation of the sale or lease within a reasonable time after contracting and (2) the other merchant does not give written notice of an objection to the contract within ten days after receiving the confirmation |
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Term
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Definition
| a rule that says that if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract |
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Term
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Definition
| a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual |
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Term
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Definition
| a record that is created, generated, sent, communicated, received, or stored by electronic means |
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Term
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Definition
| a document that is issued by a bank on behalf of a buyer who purchases goods on credit from a seller that guarantees that if the buyer does not pay for the goods, then the bank will pay the seller |
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Term
| Article 5 (Letters of Credit) |
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Definition
| An article of the UCC that governs letters of credit |
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Term
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Definition
| distinguishing of the goods named in a contract from the seller's or lessor's other goods |
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Term
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Definition
| goods not yet in existence (ie ungrown crops, unborn stock animals) |
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Term
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Definition
| legal, tangible evidence of ownership of goods |
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Term
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Definition
| a contract that requires the seller to ship the goods to the buyer via a common carrier |
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Term
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Definition
| a contract that requires the seller to deliver the goods either to the buyer's place of business or to another destination specified in the sales contract |
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Term
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Definition
| an actual piece of paper, such as a warehouse receipt or bill of lading, that is required in some transactions of pickup and delivery |
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Term
| risk of loss in a shipment contract |
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Definition
| buyer bears the risk of loss during transportation |
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Term
| risk of loss in a destination contract |
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Definition
| seller bears the risk of loss during transportation |
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Term
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Definition
| a holder of goods who is not a seller or a buyer |
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Term
| United Nations Convention on Contracts for the International Sale of Goods (CISG) |
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Definition
| a model act for international sales contracts that provides legal rules that govern the formation, performance, and enforcement of international sales contracts entered into between international businesses |
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Term
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Definition
| type of sales where the seller entrusts possession of goods to a buyer on a trial basis |
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Term
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Definition
| a type of sale in which there is no actual sale unless and until the buyer accepts the goods |
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Term
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Definition
| a contract in which the seller delivers goods to a buyer with the understanding that the buyer may return the goods if they are not used or resold within a stated or reasonable period of time |
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Term
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Definition
| an arrangement in which a seller (the consignor) delivers goods to a buyer (the consignee) to sell on his or her behalf |
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Term
| ordinary lease - where is it identified? |
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Definition
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Term
| finance lease - where is it identified? |
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Definition
| passes to the lessee on the receipt of goods; three way transaction |
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Term
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Definition
| a situation in which a thief acquires no title to goods he or she steals |
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Term
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Definition
| a title that a purchaser has on goods obtained by (1) fraud, (2) a check that is later dishonored, or (3) impersonation of another person |
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Term
| good faith purchaser for value |
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Definition
| a person to whom good title can be transferred from a person with voidable title. the real owner cannot reclaim goods from this |
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Term
| good faith subsequent lessee |
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Definition
| a person to whom a lease interest can be transferred from a person with voidable title. cannot reclaim the goods |
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Term
| buyer in the ordinary course of business |
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Definition
| a person who, in good faith and without knowledge that the sale violates the ownership or security interests of a third party, buys goods in the ordinary course of business from a person in the business of selling goods of that kind |
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