Download Understanding the Basics of Contract Law: Terms and Definitions and more Quizzes Business and Labour Law in PDF only on Docsity! TERM 1 contract DEFINITION 1 A promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty TERM 2 agreement DEFINITION 2 One of the four elements necessary for a contract; consists of an offer made by one party, the offeror, and the acceptance of the offer by another party, the offeree. TERM 3 offer DEFINITION 3 A key factor is the agreement element of a contract; consists of the terms and conditions set by one party, the offeror, and presented to another party, the offeree. TERM 4 acceptance DEFINITION 4 A key factor in the agreement element of the contract; consists of the agreement of one party, the offeree, to the terms of the offer in the contract made by the other party, the offeror. TERM 5 consideration DEFINITION 5 The bargained-for exchange; what each party gets in exchange for his or her promise under contract. TERM 6 contractual capacity DEFINITION 6 The legal ability to enter into a binding agreement. TERM 7 legal object DEFINITION 7 A purpose that does not violate a statute or public policy. TERM 8 lack of genuine assent DEFINITION 8 A defense to the agreement of a contact in which the offense claims that the offeror secured the agreement through improper means, such as duress, fraud, undue influence, or misrepresentation. TERM 9 Uniform Commercial Code (UCC) DEFINITION 9 A statutory source of contract law in the United States applicable to transactions involving the sale of goods. The UCC was created in 1952 and adopted by all 50 states, the District of Columbia, and the Virgin Islands; it may be modified by each state to reflect the wishes of the state legislature. TERM 10 bilateral contract DEFINITION 10 A promise exchanged for a promise. TERM 21 formal contract DEFINITION 21 A contract that must have a special form or must be created in a specific manner. TERM 22 contract under seal DEFINITION 22 A contract that has a seal certifying its legality. Such contracts require no consideration for them to be legal. TERM 23 recognizance DEFINITION 23 An obligation in which a party acknowledges in court he or she will perform some specified act and/or pay a price on failure to do so. TERM 24 letter of credit DEFINITION 24 A binding document that a buyer can request from a bank to guarantee that the payment for goods will be made to the seller. TERM 25 negotiable instrument DEFINITION 25 A written document signed by a person who makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument; an acceptable medium for exchanging value from one person to another. TERM 26 informal contract DEFINITION 26 A contract that requires no formalities. TERM 27 intent DEFINITION 27 The intended purpose or goal of an action, especially in a contract. TERM 28 option contract DEFINITION 28 An agreement whereby the offeree gives the offeror a piece of consideration in exchange for the offeror's agreement to hold the offer open for the specified period of time. TERM 29 mirror-image rule DEFINITION 29 The principle which holds that the terms of the acceptance must mirror the terms of the offer; if the terms of the acceptance do not mirror the terms of the offer, no contract is formed and the attempted acceptance is a counteroffer. TERM 30 mailbox rule DEFINITION 30 The principle which holds that an acceptance is valid when it is placed in the mailbox, whereas a revocation is effective only when received by the offeree. In some jurisdictions the mailbox rule has been expanded to faxes.
