Business Law Unit 2

Front 1

Promise

Back 1

A declaration that binds a person who makes it (the promisor) to do or not to do a certain act.

Front 2

Promisor

Back 2

A person who makes a promise.

Front 3

Promisee

Back 3

A person to whom a promise is made.

Front 4

Contract

Back 4

A set of promises constituting an agreement between parties, giving each a legal duty to the other and also the right to seek a remedy for the breach of the promises or duties.

Front 5

Objective Theory of Contracts

Back 5

Theory that a party's intention to enter into a contract is judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's secret, subjective intentions.

Front 6

Offeror

Back 6

A person who makes an offer.

Front 7

Offeree

Back 7

A person to whom an offer is made.

Front 8

Bilateral Contract

Back 8

A type of contract where a promise is given in exchange for a return promise.

Front 9

Unilateral Contract

Back 9

A contract that results when an offer can be accepted only by the offer's performance.

Front 10

Formal Contract

Back 10

An agreement that by law requires a specific form for its validity.

Front 11

Informal Contract

Back 11

A contract that does not require a specific form or method of creation to be valid.

Front 12

Express Contract

Back 12

The terms of the agreement are fully and explicitly stated in words, oral or written.

Front 13

Implied Contract

Back 13

A contract that is implied from the conduct of the parties.

Front 14

Executed Contract

Back 14

A contract that has been fully performed on both sides.

Front 15

Executory Contract

Back 15

A contract that has not been fully performed on either side.

Front 16

Valid Contract

Back 16

A contract that results when the elements necessary for contract formation.

Front 17

Voidable Contract

Back 17

A valid contract but one that can be avoided at the option of one or both of the parties.

Front 18

Unenforceable Contract

Back 18

A contract that cannot be enforced because of certain legal defenses against it.

Front 19

Void Contract

Back 19

A contract having no legal force or binding contract.

Front 20

Quasi Contract

Back 20

An obligation or contract imposed by law (to court), in the absence of an agreement, to prevent the unjust enrichment of one party.

Front 21

Agreement

Back 21

The parties must agree on the terms of the contract.

Front 22

Offer

Back 22

A promise of commitment to perform or refrain from performing some specified act in the future.

Front 23

Revocation

Back 23

The offeror's act of withdrawing an offer.

Front 24

Mirror Image Rule

Back 24

A common law rule that requires the terms of the offer's acceptance to exactly match the terms of the offeror's offer for a valid contract to be formed.

Front 25

Option Contract

Back 25

A contract that is created when an offeror promises to hold an offer open for a specified period of time in return for a payment given by the offeree.

Front 26

Accpetance

Back 26

The voluntary act by the offeree that shows assent, or agreement, to the terms of an offer.

Front 27

Mailbox Rule

Back 27

A common law rule that acceptance takes effect, and thus completes formation of the contract, at the time the offer sends or delivers the acceptance via the communication mode expressly or impliedly authorized by the offeror.

Front 28

E-Contract

Back 28

A contract that is formed electronically.

Front 29

Click-On Agreement

Back 29

An agreement that arises when an online buyer clicks on "I agree," or otherwise indicates her or his assent to be bound by the terms of an offer.

Front 30

Shrink-Wrap Agreement

Back 30

An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged.

Front 31

Browse-Wrap Term

Back 31

A term or condition of use that is presented when an online buyer downloads a product but does not require the buyer's explicit agreement.

Front 32

E-Signature

Back 32

An electronic sound, symbol, or process attached to or logically associated with a record and adopted by a person with the intent to sign the record.

Front 33

Partnering Agreement

Back 33

An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.

Front 34

Record

Back 34

Information that is either inscribed on a tangible medium or stored in an electronic or other medium and is retrievable.

Front 35

Consideration

Back 35

The value given in return for a promise.

Front 36

Forbearance

Back 36

The act of refraining from an action that one has a legal right to undertake.

Front 37

Rescission

Back 37

The unmaking of a contract so as to return the parties to the positions they occupied before the contract was made.

Front 38

Past Consideration

Back 38

An act that has already taken place at the time a contract is made and that ordinarily, by itself, cannot be consideration for a later promise to pay for the act.

Front 39

Accord and Satisfaction

Back 39

A common means of setting a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owed.

Front 40

Liquidated Debt

Back 40

A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.

Front 41

Release

Back 41

A contract in which one party forfeits the right to pursue a legal claim against the other party.

Front 42

Covenant Not to Sue

Back 42

An agreement to substitute a contactual obligation for some other type of legal action based on a valid claim.

Front 43

Promissory Estoppel

Back 43

A doctrine that can be used to enforce a promise when the promisee has justifiably relied on it and when justice will be better served by enforcing the promise.

Front 44

Estopped

Back 44

Barred, impeded, or precluded.

Front 45

Contractual Capacity

Back 45

The legal ability to enter into a contractual relationship.

Front 46

Emancipation

Back 46

In regard to minors, the act of being freed from parental control.

Front 47

Disaffirmance

Back 47

The legal avoidance, or setting aside, of a contractual obligation.

Front 48

Necessaries

Back 48

Necessities required for life, such as food, shelter, clothing, and medical attention.

Front 49

Ratification

Back 49

The acceptance or confirmation of an act or agreement that gives legal force to an obligation that previously was not enforceable.

Front 50

Usury

Back 50

A lender who charges an interest rate above the lawful maximum.

Front 51

Covenant Not to Compete

Back 51

A contractual promise in which one party agrees not to compete in business with another party for a certain period of time and within a specified geographical area.

Front 52

Reformation

Back 52

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Front 53

Unconscionable Contract or Clause

Back 53

A contract or clause that is void on the basis of public policy because one party was forced to accept terms that are unfairly burdensome and that unfairly benefit the stranger party.

Front 54

Adhesion Contract

Back 54

A standard-form contract in which the stranger party dictates the terms.

Front 55

Exculpatory Clause

Back 55

A clause that releases a contractual party from liability in the event of monetary or physical injury, no matter who is at fault.

Front 56

Blue Sky Laws

Back 56

State laws that regulate the offering and sale of securities for the protection of the public.

Front 57

Voluntary Consent

Back 57

Knowledge of, and genuine assent to, the terms of a contract.

Front 58

Unilateral Mistake

Back 58

A mistake that occurs when one party to a contract is mistaken as to a material fact.

Front 59

Material Fact

Back 59

A fact to which a reasonable person would attach importance in determining his or her cause of action.

Front 60

Bilateral Mistake

Back 60

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

Front 61

Scienter

Back 61

Knowledge by a misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Front 62

Undue Influence

Back 62

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.

Front 63

Duress

Back 63

The use of threats to force a party to enter into a contract.