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Business 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 | Offer is accepted by offeree through communication of the promise to the offeror |
| Capacity | Legal ability to enter into a contract |
| Consideration | Exchange of benefits and detriments by the parties to an agreement |
| 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 that you have the right to do |
| Fraudulent Misrepresentation | Party to a contract deliberately makes an untrue statement of fact |
| Genuine Agreement (Assent) | A valid offer has been made by the offeroe, and a valid acceptance has been exercised by the offeree |
| Illusory Promise | Clause or wording that allows party to escape from legal obligation |
| Implied | Contract that comes about from the action of the parties |
| Insanity | Offeroe is declared insane |
| Legality | |
| Mentally Incapacitated | Lacking the ability to understand the consequences of his or her contractual acts |
| Mirror Image Rule | Terms of the acceptance must match exactly (mirror) the terms of the offer |
| Mutual Mistake (Bilateral Mistake) | Both parties are mistaken about an important fact |
| Nominal Consideration | Token amount in a written contract where either the parties cannot or do not wish to state the amount |
| Offer | Proposal by one party to another with intent to create a legal binding agreement |
| Offeree | Offer made to the person |
| Offeror | Makes the offer |
| Option | Offeree gives the offeror something of value in return for a promise to keep the offer open for a set period of time |
| Oral | Created by two or more people speaking to each other |
| Past Performance | An act that has already been performed cannot be consideration in a contract |
| Price Fixing | Competitors agree on certain price ranges within which they will sell their products |
| Rejection | Refusal by the offeree |
| Restrictive Covenant | Agreement not to compete in a region for a period of time |
| Revocation | Taking back of an offer by offeror |
| Statute of Frauds | Requires that certain contracts be in writing to be enforceable |
| Unconscionable | So grossly unfair or oppressive that it would shock the conscience of the court |
| Undue Influence | Unfair and improper persuasive pressure within a relationship of trust |
| Unenforceable Contract | Contract that court will not uphold, usually because of some rule of law |
| Unilateral | Offeror promises something in return for offeree's performance and indicates that performance represents acceptance |
| Unilateral Mistake | An error on the part of one of the parties |
| Usury | State sets a max interest rate |
| Valid Contract | Includes all elements recognized by the courts >Legally binding |
| Void Contract | Without legal effect >Contracts missing one or more elements |
| Voidable Contract | One or more parties can get out of contract for some legal reason |
| Written | Contract terms are written so that both parties know the exact terms |
Created by:
abcrudup