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Bus Law 2.01
Understand Elements and Characteristics of a Contract
| Term | Definition |
|---|---|
| Acceptance | Unqualified willingness by the offeree to go along with the offer. |
| Benefits | Something that a party was not previously entitled to receive. |
| Bilateral | Between two parties where each promises to perform and act in exchange for the other party's act. |
| Capacity | Legal ability to enter into a contract. |
| Consideration | Exchange of benefits and detriments by the parties to an agreement. |
| Counteroffer | Any change to the terms of the offer. |
| Death | Offeror dies |
| Detriments | Any loss suffered; anything given up. |
| Duress | Overcoming a person's free will by use of force or by threat of force or bodily harm. |
| Economic Duress | Threats to a person's business or income. |
| Emancipation | Severing of the parent-child relationship. |
| Express | Contract statement that may be written or oral. |
| Firm Offer | A written offer for goods that states the period of time during which the offer will stay open. |
| Forbearance | Not doing something you have the right to do. |
| Fraudulent Misrepresentation | Any misrepresentation, either by misstatement or by omission of a material fact, knowingly made with the intention of deceiving another and on which a reasonable person would and does rely to his or her detriment. |
| Genuine Agreement (Assent) | Valid offer met by valid acceptance. |
| Illusory Promises | Does not really bind the promise to do or refrain from doing anything, no consideration, not enforceable. |
| Implied | Powers inferred from the express powers that allow Congress to carry out its functions. |
| Insanity | A legal status indicating that a person cannot be held responsible for his or her actions because of mental illness. |
| Legality | Contract must not violate statutes. |
| Mentally Incapacitated | A person who lacks the ability to understand the consequences of a contract because of mental illness, ment retardation, or senility. |
| Mirror Image Rule | A common law rule that requires that the terms of the offeree's acceptance adhere exactly to the terms of the offeror's offer for a valid contract to be formed. |
| Mutual Mistake (Bilateral Mistake) | Error made by both parties. |
| Nominal Consideration | Small amount of money identified in a written contract when parties cannot or do not wish to state the amount precisely. |
| Offer | A proposal by one party to another intended to create a legally binding agreement. Terms of offer must be clear, definite, and certain. |
| Offeree | A person to whom an offer is made. |
| Offeror | A person who makes an offer. |
| Option | A choice of ways of receiving policy dividends, nonforfeiture values, death benefits, or cash values. |
| Oral | Created by two or more people speaking to each other. |
| Past Performance | An act already performed cannot be included in a contract. |
| Price Fixing | An agreement among firms to charge one price for the same good. |
| Rejection | An offer terminates when the offeree rejects it. |
| Restrictive Covenant | A provision in a deed to real property prohibiting its sale to a person of a particular race or religion. Judicial enforcement of such deeds is unconstitutional. |
| Revocation | An act or instance of calling back, an annulment, cancellation. |
| Statute of Frauds | A state statute under which certain types of contracts must be in writing to be enforceable. |
| Unconscionable | Unscrupulous; shockingly unfair or unjust. |
| Undue Influence | An overpowering influence that a person holding a dominant or fiduciary position holds over another. |
| Unenforceable Contract | A valid contract rendered unenforceable by some statute or law. |
| Unilateral | Involving only one part or side. |
| Unilateral Mistake | Error by one of the parties. |
| Usury | The practice of lending money at exorbitant rates. |
| Valid Contract | A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. |
| Void Contract | A contract having no legal force or binding effect. |
| Voidable Contract | A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties. |
| Written | Contract terms are written so that both parties know the exact terms. |
Created by:
JoeStellman
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