Commercial Law: Contract Definitions

Front 1

Contract

Back 1

An agreement that requires the mutual ascent of at least 2 parties to do something or refrain from doing something.

Front 2

Offer

Back 2

A tentative promise made by one party, the offeror, subject to a condition or containing a request to the other party, the offeree.

Front 3

Essence of an Offer

Back 3

A contract barring its acceptance

Front 4

Doctrine of Fundamental Relief

Back 4

if contract breached in fundamental way, the court will negate law for lost cause

Front 5

Contra-Preferentum

Back 5

courts take the position against those who wrote the contract if there is ambiguity in the contract

Front 6

Rejection

Back 6

Offeree terminates original offer

Front 7

Counter-offer

Back 7

amounts to rejection of original offer and terminates it, new offer made

Front 8

Lapse

Back 8

offeree fails to accept offer within time specified

Front 9

Revocation

Back 9

withdrawing an offer

Front 10

Acceptance

Back 10

unqualified acceptance of terms of an offer, all without change

Front 11

Consideration

Back 11

the matter of exchange

Front 12

Gratuitous Consideration

Back 12

A promise made without consideration and because there is no consideration, the contract is void

Front 13

Peppercorn

Back 13

Exchange of something to make contract enforceable

Front 14

Capacity

Back 14

ability of promisor to bind himself or herself to contract

Front 15

Impugn

Back 15

To attack as false or questionable

Front 16

Void contracts

Back 16

To say it was never in law form at all

Front 17

Voidable contracts

Back 17

Created by equity to treat third parties more fairly and generously

Front 18

Misrepresentation

Back 18

false assertion relating to fact, not opinion

Front 19

Innocent Misrepresentation

Back 19

party misrepresents info but honestly believe that the info was true

Front 20

Negligent Misrepresentation

Back 20

vendor neglects to check into a significant matter and negligently makes a misrepresentation that induces another party to buy the goods

Front 21

Fraudulent Misrepresentation

Back 21

a party deliberately attempts to deceive the other party

Front 22

Undue Influence

Back 22

The domination of one party over the mind of the other party to such a degree as to deprive the latter of the will to make an independent decision

Front 23

Duress

Back 23

illegitimate pressure, actual or threatened violence or imprisonment as a means of coercing a party to enter into a contract

Front 24

Plain-Meaning Approach

Back 24

restricts interpretation to the ordinary meaning of the word

Front 25

Liberal Approach

Back 25

looks to the purpose of the parties in drafting their agreement

Front 26

Parol Evidence Rule

Back 26

A term previously agreed to between the parties but not included in the final written form of the contract, will not later be permitted to add or contradict the contract

Front 27

Implied Terms of a Contract

Back 27

terms that aren’t in contract but either courts or statutes imply them into contract

Front 28

Doctrine of Privity

Back 28

a contract cannot, as a genera rule, confer rights or impose obligations arising under it on any person except the parties in a contract

Front 29

Severability Clause

Back 29

States that if one term of a contract is held void or unenforceable, that term can be severed from the contract and the rest of the contract is still enforceable

Front 30

Novation

Back 30

a contractual party has been changed

Front 31

Discharge of a Contract

Back 31

to cancel obligations of a contract, to make an agreement or contract null or inoperative

Front 32

Discharge by performance

Back 32

Discharge because parties live up to their promise

Front 33

Waiver

Back 33

contract does not have to be performed if both parties agree between themselves not to perform

Front 34

Substituted Agreement

Back 34

agreement to discharge original contract and replace it with a new one by completely amending it

Front 35

Satisfaction and Accord

Back 35

buying your way out of a contract

Front 36

Condition Precedent

Back 36

A future or uncertain event, which must either happen or not happen before the promisor’s liability is established

Front 37

Condition Subsequent

Back 37

An uncertain event that brings a promisor’s liability to an end if it happens

Front 38

Discharge by Frustration

Back 38

inability to perform is not own fault

Front 39

Breach

Back 39

occurs when one party fails to live up to provisions of contract

Front 40

Warranties

Back 40

minor term of contract where the breach of which only allows injured party to sue for difference in value

Front 41

Conditions

Back 41

breach of essential terms of contract

Front 42

Fundamental Terms

Back 42

negatives of the effectiveness of any exemption of liability cause

Front 43

Express Repudiation of Liability

Back 43

one party doesn’t perform as promised

Front 44

Non Performance

Back 44

One party acts in a manner that makes its promise impossible to perform

Front 45

Failure of Performance

Back 45

failure to perform at all

Front 46

Doctrine of Substantial Performance

Back 46

courts are willing to recognize substantial performance by the promissory through defective or incomplete in minor respects to keep the other party bound

Front 47

Duty to mitigate

Back 47

A person who has sustained a loss as a result of a breach of conduct must do what it can to mitigate the extent of the loss.

Front 48

Principal of remoteness

Back 48

Whether the damages were reasonably foreseeable at the time of contract

Front 49

Liquidated damages

Back 49

term in contract where the parties agree in advance to the amount to be paid in damages if there is a breach

Front 50

Specific Performance

Back 50

Court orders defendant to do a specified act

Front 51

Injunction

Back 51

Court order restraining a party to act in a particular manner

Front 52

Recission

Back 52

Contract set aside and the court puts parties back in original position