Business Law 210 Exam 2 Terms -Unit 4(1 of 3)

  1. Acceptance
    "(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."
  2. Accord and Satisfaction
    "An agreement for payment (or other performance) between two parties, one of whom has a right of action against the other. After the payment has been accepted or other performance has been made, the �accord and satisfaction� is complete and the obligation is discharged."
  3. Adhesion contract
    "A �standard�form� contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms."
  4. Agreement
    "A meeting of two or more minds in regard to the terms of a contract; usually broken down into two events�an offer by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made."
  5. Bilateral contract
    A type of contract that arises when a promise is given in exchange for a return promise.
  6. Browse-wrap terms
    "Terms and conditions of use that are presented to an Internet user at the time certain products, such as software, are being downloaded but that need not be agreed to (by clicking �I agree,� for example) before being able to install or use the product."
  7. Click-on agreement
    "An agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, �I agree�; sometimes referred to as a click�on license or a click�wrap agreement."
  8. Consideration
    "Generally, the value given in return for a promise or a performance. The consideration, which must be present to make the contract legally binding, must be something of legally sufficient value and bargained for."
  9. Contract
    "An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act now or in the future."
  10. Contractual capacity
    The threshold mental capacity required by the law for a party who enters into a contract to be bound by that contract.
  11. Counteroffer
    An offeree�s response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.
  12. Covenant not to compete
    "A contractual promise to refrain from competing with another party for a certain period of time and within a certrain geographic area. Although covenants not to compete restrain trade, they are commonly found in partnership agreements, business sale agreements, and employment contracts. If they are ancillary to such agreements, covenants not to compete will normally be enforced by the courts unless the time period or geographic area is deemed unreasonable."
  13. Covenant not to sue
    Parties substitute a contractual obligation for some other type of legal action based on a valid claim.
  14. Definiteness of Terms
    "An offer must have reasonably definite terms so that a court can determine if a breach has occurred and give an appropriate remedy. The specifc terms required depend on the type of contract. Generally a contract must include the following terms, either expressed in the contract or capapable of being reasonably inferred from it: (1) The ID of the parties (2) The ID of the object or subject matter of the contract (also the quantity, when appropriate), including the work to be performed, with specific ID of such items as goods, services, and land. (3) The consideration to be paid (4) The time of payment, delivery, or performance. "
  15. Elements of a Contract
    "For a valid contract, all 4 of the following must exist (1) Agreement - An agreement to form a contract includes an offer, and an acceptance. One party must offer to enter into a legal agreement, and another party must accept the terms of the offer. (2) Consideration - Any promises made by the parties to the contract must be supported by legally sufficient and bargained for consideration (something of value received or promised, such as money, to convince a person to make a deal). (3) Contractual Capacity - Both parties entering into the contract must have the contractual capacity to do so; the law must recognize them as possessing characteristics that qualify them as competent parties. (4) Legality - The contract's purpose must be to accomplish some goal that is legal and not against public policy. "
  16. Exculpatory clause
    "A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault."
  17. Executed contract
    A contract that has been completely performed by both parties.
  18. Executory contract
    A contract that has not as yet been fully performed.
  19. Express contract
    "A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written."
  20. Formal contract
    "A contract that by law requires a specific form, such as being executed under seal, to be valid."
  21. Forum-selection clause
    "A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract."
  22. Implied contract
    A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract). Also known as implied contract.
  23. Informal contract
    A contract that does not require a specified form or formality in order to be valid.
  24. Innocent Misrepresentation
    A false statement of fact or an act made in good faith that deceives and causes harm or injury to another.
  25. Justifiable Reliance
    "The 3rd element of fraud. The decieved party must have a justifiable reason for relying on the misrepresentation, and the misrepresentation must be an important factor, but not necessarily the sole factor, in inducing thhat party to enter into the contract. "
  26. Legality
    The contract's purpose must be to accomplish some goal that is legal and not against public policy.
  27. Liquidated debt
    A debt that is due and certain in amount.
  28. Mailbox rule
    "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."
  29. Minor�s Contractr
    "(Not totally sure about this - ask instructor) The general rule is that a mior can enter into any contract tha tan adult can, provided that the contract is not one prohibited by law for minors. A contract entered into by a minor is voidable at the option of that minor, subject to certain exceptions. To exercise the option to avoid a contract, a minor need only manifest an intention not to be bound by it. The minor avoids the contract by disaffirming it. "
  30. Mirror image rule
    "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."
  31. Mistake
    "Mistake of fact: occurs in two forms, bilateral (mutual, or made by both parties) and unilateral (made by only one person of the party). Mistakes of value: concerns the future market value or quality of an object, and is normally enforceable. Can be bilateral or unilateral. "
  32. Mutual Assent
    Each parties form or manifestation of their ageement to the terms of a contract.
  33. Mutual (Bilateral) Mistake
    """mutual misunderstanding concerning a basic assumption on which the contract was made."" When both parties are mistaken about the same material fact, the contract can be rescinded by either party. Normally, the contract is voidable by the adversely affected party."
  34. Necessaries
    "Necessities required for life, such as food, shelter, clothing, and medical attention; may include whatever is believed to be necessary to maintain a person�s standard of living or financial and social status."
  35. Negligent Misrepresentation
    "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."
  36. Objective theory of contracts
    "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."
  37. Offer
    A promise or commitment to perform or refrain from performing some specified act in the future.
  38. Offeree
    A person to whom an offer is made.
  39. Offeror
    A person who makes an offer.
  40. Option contract
    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.
  41. Past consideration
    "Something given or some act done in the past, which cannot ordinarily be consideration for a later bargain."
  42. Preexisting Duty
    "Under most circumstances, a promise to do what one already has a legal duty to do eos not constitute sufficient consideration. The preexisting legal duty may be imposed by law or may arise out of a previous contract. "
  43. Promisor
    A person who makes a promise.
  44. Promissee
    A person to whom a promise is made.
  45. Promissory estoppel/detrimental reliance
    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.
  46. Quantum meruit
    "(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."
  47. Quasi contract
    "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."
  48. Ratification
    The act of accepting and giving legal force to an obligation that previously was not enforceable.
  49. Release
    A contract in which one party forfeits the right to pursue a legal claim against the other party.
  50. Rescission
    "(pronounced rih�sih�zhen) A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made; may be effected through the mutual consent of the parties, by their conduct, or by court decree."
  51. Revocation
    "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."
  52. Shrink-wrap agreement
    An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged; sometimes called a shrink�wrap license.
  53. Unconscionable
    "(pronounced un�kon�shun�uh�bul) contract or clause A contract or clause that is void on the basis of public policy because one party, as a result of his or her disproportionate bargaining power, is forced to accept terms that are unfairly burdensome and that unfairly benefit the dominating party."
  54. Undue Influence
    "Arises from special kinds of relationships in which one party can greatly influence another party, thus overcoming that party's free will. A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable. "
  55. Unenforceable contract
    A valid contract rendered unenforceable by some statute or law.
  56. Unilateral contract
    A contract that results when an offer can only be accepted by the offeree�s performance.
  57. Unilateral Mistake
    "Occurs when only one of the contracting parties is mistaken about a material fact. Generally does not afford the mistaken party any right to relief from the contract. Normally, the contract is enforceable. "
  58. Usury
    Charging an illegal rate of interest.
  59. Valid contract
    "A contract that results when elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present."
  60. Void contract
    A contract having no legal force or binding effect.
  61. Voidable contract
    "A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties."
Card Set
Business Law 210 Exam 2 Terms -Unit 4(1 of 3)
Business Law 210 Exam 2 Terms -Unit 4(1 of 3)