Contracts Definitions

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Actual Authority

Back 1

principle gives authority

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Adjunction

Back 2

The union of an item of personal property owned by one person with that owned by another

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Affirmative Defense

Back 3

defendant's assertion of facts and arguments that, if true, will defeat the plaintiff's or prosecution's claim, even if all the allegations in the complaint are true

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Agent

Back 4

acts with due care and exclusively for the interests of the principle

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Apparent Authority

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principle has done something to make a third party reasonably believe the agent has authority to do all things necessary to carryout out

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Arbitration

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A dispute-resolution process in which the disputing parties choose one or more neutral third parties to make a final and binding decision resolving the dispute

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Assize

Back 7

a meeting of a court presided over by a judge or judges who travel periodically from town to town. (rural county courts sat on by judges from London, etc.)

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Assumpsit

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An express or implied promise, not under seal, by which one person undertakes to do some act or pay something to another or the suit brought for the breach of this contract; A common-law action for breach of such a promise or for breach of a contract — the creditor's assumpsit against the debtor

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Axiomatic

Back 9

unquestionable, self-evident; something to base argument on

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Bankruptcy

Back 10

The quality, state, or condition of being without enough money to pay back what one owes

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Bargain(Negotiation)

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A mutual undertaking, contract, or agreement. A contract or agreement between two parties, the one to sell goods or lands, and the other to buy them

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Beneficiary

Back 12

Person other than the promisee whom the performance of a contract will benefit

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Black Letter Law

Back 13

simple, well-known rules of law

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Bond

Back 14

A written promise to pay money or do some act if certain circumstances occur or a certain time elapses; a promise that is defeasible upon a condition subsequent (often w/ certain interest rate)

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Breach

Back 15

failure to render a performance when a performance is due

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Caveat Emptor

Back 16

“let the buyer beware”

meaning that the seller bore no responsibility at all for the quality of the product he was selling unless he expressly guaranteed it or gave a “warranty” to the buyer

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Charitable Pledge

Back 17

contract between a donor and a charity in which the donor promises to make a contribution in the future

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Charitable Subscription

Back 18

an oral or written promise to do certain acts or to give real or personal property to a charity or for a charitable purpose

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Choice of Law Issue

Back 19

federal judge has to decide which state’s law to usewill apply the law of the state in which the contract was made

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Complete Integration

Back 20

a written document intended to be the full expression of the agreement between the parties

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Conditions

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something that must happen before performance is due

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Consequential Damages

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Losses that do not flow directly and immediately from an injurious act but that result indirectly from the actdamage to person or property as a proximate consequence of the breach of contract

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Consequential Other Loss

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A loss arising from the results of damage rather than from the damage itself; A consequential loss is proximate when the natural and probable effect of the wrongful conduct, under the circumstances, is to set in operation the intervening cause from which the loss directly results

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Consideration

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Something (such as an act, a forbearance, or a return promise) bargained for and received by a promisor from a promisee; that which motivates a person to do something, esp. to engage in a legal act

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Construction

Back 25

judicial role in determining the legal effect of that language

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Contract

Back 26

an agreement that has legal effect; that is, it creates obligations for which some sort of legal enforcement will be available if performance is not forthcoming as promised; negotiated allocation of risk and cost

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Counter-Offer

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An offeree's new offer that varies the terms of the original offer and that ordinarily rejects and terminates the original offer. • A late or defective acceptance is considered a counteroffer.

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Cross-Appeal

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An appeal by the appellee, usu. heard at the same time as the appellant's appeal.

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Deceit

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A false statement of fact made by a person knowingly or recklessly (i.e., not caring whether it is true or false) with the intent that someone else will act on it; A tort arising from a false representation made knowingly or recklessly with the intent that another person should detrimentally rely on it

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Declaratory Judgement Action

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legal determination of a court that resolves legal uncertainty for the litigants. (what your rights are in a certain case)

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Default

Back 31

The omission or failure to perform a legal or contractual duty; esp., the failure to pay a debt when due.

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Demurrer

Back 32

A pleading stating that although the facts alleged in a complaint may be true, they are insufficient for the plaintiff to state a claim for relief and for the defendant to frame an answer.

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Disclosure Legislation

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require commercial parties to disclose information to consumers in a meaningful fashion

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Diversity Jurisdiction

Back 34

A federal court's exercise of authority over a case involving parties who are citizens of different states and an amount in controversy greater than a statutory minimum.

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Doctrine of Partial Performance

Back 35

partial performance in reliance on the oral agreement and acceptance of such performance as evidence of an enforceable contract.

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Doctrine of Substantial Performance

Back 36

The rule that if a good-faith attempt to perform does not precisely meet the terms of an agreement or statutory requirements, the performance will still be considered complete if the essential purpose is accomplished, subject to a claim for damages for the shortfall.

Under the Uniform Probate Code, a will that is otherwise void because some formality has not been followed may still be valid under the substantial-performance doctrine.

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Duress

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Broadly, a threat of harm made to compel a person to do something against his or her will or judgment; esp., a wrongful threat made by one person to compel a manifestation of seeming assent by another person to a transaction without real volition

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Enforceable

Back 38

court will provide a remedy for breach

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Enforceable Contract

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court can determine remedy for breach of contract

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Equitable Rescission

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A party's unilateral unmaking of a contract for a legally sufficient reason, such as the other party's material breach, or a judgment rescinding the contract ordered by a court of equity

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Executory Gift

Back 41

gift to be performed in the future

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Expectation

Back 42

what the court seeks to protect in its award of contract damages is the gain the plaintiff would have realized if the contract between the plaintiff and defendant had been fully performed, as promised by both parties

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Expectation Value

Back 43

value that the parties would have received if the contract had been fully formednegotiated terms

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Express Warranties

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negotiated terms

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Failure of Consideration

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A seriously deficient contractual performance that causes a contract's basis or inducement to cease to exist or to become worthless

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Federal Question Jurisdiction

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has to do with USA laws and the Constitution

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Fiduciary Duty

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A duty of utmost good faith, trust, confidence, and candor owed by a fiduciary (such as an agent or a trustee) to the beneficiary (such as the agent's principal or the beneficiaries of the trust)

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Forbearance

Back 48

exchange for promise is either a detriment to the promisee and a gain for the promisor; giving up a legal right

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Foreclose

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To terminate a mortgagor's interest in property; to subject (property) to foreclosure proceedings

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Goods

Back 50

anything that is movable at the time of identification of a contract

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Gratification

Back 51

an agent purports to act as an agent but acts outside of their authority, yet the principle excepts the action anyways and therefore ratifies the action of the agent

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Gratuitous Promise

Back 52

promise made w/o consideration

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Illusory Promise

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A promise that appears on its face to be so insubstantial as to impose no obligation on the promisor; an expression cloaked in promissory terms but actually containing no commitment by the promisor

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Implied in Fact

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A contract that the parties presumably intended as their tacit understanding, as inferred from their conduct and other circumstances. (only acts due to the understanding that action would merit restitution — actual contract)

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Implied in Law

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obligation imposed by law because of some special relationship between the parties or because one of them would otherwise be unjustly enriched (Purely equity and not a contract, but is instead remedy for the plaintiff to recover a benefit conferred on the defendant)

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Implied Warranties

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An obligation imposed by the law when there has been no representation or promise; esp., a warranty arising by operation of law because of the circumstances of a sale, rather than by the seller's express promise.

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Implied Warranty of Merchantability

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arises whenever a merchant sells goods unless the agreement expressly provides otherwise

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Improve Enforcement

Back 58

most consumer protection statutes contain provisions designed to improve enforcement

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Incidental Damages

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(1) Losses reasonably associated with or related to actual damages. (2) A seller's commercially reasonable expenses incurred in stopping delivery or in transporting and caring for goods after a buyer's breach. UCC § 2-710. (3) A buyer's expenses reasonably incurred in caring for goods after a seller's breach

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Indemnification

Back 60

the action of compensating for loss or damage sustained

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Indemnity Clause

Back 61

a contractual provision by which one party agrees to answer for any specified or unspecified liability or harm that the other party might incur; a risk shifting device; it is directly applicable to price.

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Injunction

Back 62

a court order commanding or preventing an action

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Inter alia

Back 63

“among other things”

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Interpretation

Back 64

process by which a court gives meaning to contractual language when the parties attach materially different meanings to that language

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Knockout Rule

Back 65

different terms cancel each other out, leaving a hole in the contract which the court fills with “gap fillers”

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Laesio Enormis

Back 66

a party could rescind a and sale transaction if the disproportion between the values exchanged was greater than two to one

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Legal Instrument

Back 67

A written legal document that defines rights, duties, entitlements, or liabilities, such as a statute, contract, will, promissory note, or share certificate.

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Letter of Intent

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A written statement detailing the preliminary understanding of parties who plan to enter into a contract or some other agreement; a noncommittal writing preliminary to a contract.

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Libel

Back 69

(admiralty) To sue in admiralty or ecclesiastical court.

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Lien

Back 70

A legal right or interest that a creditor has in another's property, lasting usually until a debt or duty that it secures is satisfied

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Liquidate

Back 71

To determine the liabilities and distribute the assets of (an entity), esp. in bankruptcy or dissolution; turn assets into cash

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Liquidated Damages

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An amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches.

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Majoritarian Default Terms

Back 73

contract terms that the court deems to be implied and therefore is a part of the contract

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Material

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Essential to contract

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Material Alteration

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A significant change in something; esp., a change in a legal instrument that alters the instrument's legal meaning or effect

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Mesne

Back 76

Occupying a middle position; intermediate or intervening, esp. in time of occurrence or performance

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Mistake

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The situation in which either (1) the parties to a contract did not mean the same thing, or (2) at least one party had a belief that did not correspond to the facts or law

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Mortgage

Back 78

A lien against property that is granted to secure an obligation (such as a debt) and that is extinguished upon payment or performance according to stipulated terms.

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Mutual General Release

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both parties withdraw their actions against the other party (should always be identical)

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Negotiable Instrument

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A written instrument that (1) is signed by the maker or drawer, (2) includes an unconditional promise or order to pay a specified sum of money, (3) is payable on demand or at a definite time, and (4) is payable to order or to bearer.

UCC § 3-104(a). Among the various types of negotiable instruments are bills of exchange, promissory notes, bank checks, certificates of deposit, and other negotiable securities

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Offer

Back 81

manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it

direct, complete proposal that a contract be entered into, providing for an exchange of performances to which each would be willing to agree

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Option

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(1) contract with a promise to suspend the power to revoke and must be supported by the power of consideration; (2) A contract by which a property owner agrees with another party that the latter may buy the property at a fixed price within a specified time; the right or privilege to buy property at the election of the purchaser.

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Pacta Sunt Servanda

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the rule that agreements and stipulations, esp. those contained in treaties, must be observed

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Parol Evidence

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evidence of oral statements

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Policy

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any societal goal that will be furthered by a particular decision

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Precedent

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prior decision with facts sufficiently similar to the case sub juice (under adjudication) that the court feels obligated to follow and render a similar decision

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Pro Rata

Back 87

proportionally; according to an act rate, measure, or interest

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Promise

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manifestation of intention to act or refrain from acting in a specific way, so made as to justify a promise in understanding that a commitment has been made

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Promissory Estoppel

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The principle that a promise made without consideration may nonetheless be enforced to prevent injustice if the promisor should have reasonably expected the promisee to rely on the promise and if the promisee did actually rely on the promise to his or her detriment

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Promissory Fraud

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A promise to perform made when the promisor had no intention of performing the promise

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Punitive Damages

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Damages awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit; specif., damages assessed by way of penalizing the wrongdoer or making an example to others.

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Quantum Meriut

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The reasonable value of services; damages awarded in an amount considered reasonable to compensate a person who has rendered services in a quasi-contractual relationship

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Quasi Contract

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all non-contractual obligations which are treated, for the purpose of affording a remedy, as if they were contracts

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Reasonable Notice

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relating to “the circumstances under which notice is given and the extent of advance warning” not the method by which notice is given

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Record

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To deposit (an original or authentic official copy of a document) with an authority

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Reliance

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trust that causes a person to expect specified benefits and to perform as instructed by the contract.

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Reporter System

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wrote down opinions of common law courts in order for people to know what the law was

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Restitution

Back 98

quasi contract where one party confers a benefit and retains the benefit under circumstances that would be unfair w/o paying market value; the set of remedies associated with that body of law, in which the measure of recovery is usu. based not on the plaintiff's loss, but on the defendant's gain

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Restrictive Covenant

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A promise, usu. in a sale-of-business, partnership, or employment contract, not to engage in the same type of business for a stated time in the same market as the buyer, partner, or employer.

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Revocation

Back 100

withdrawal of an offer by the offeror

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Right of Preemption (First Option to Buy)

Back 101

A potential buyer's contractual right to have the first opportunity to buy, at a specified price, if the seller chooses to sell within the contracted period

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Satisfaction Clause

Back 102

in the contract, gives one party the right to decide if the other party has fulfilled the terms of the contract up to their satisfaction; tied to discretionary powers

default rule: (objective) when there is no specific clause, the standard of satisfaction held by most people is appropriate

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Scope of Employment

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The range of reasonable and foreseeable activities that an employee engages in while carrying out the employer's business

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Sine Qua Non

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Something on which something else necessarily depends

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Special Term

Back 105

A term of court scheduled outside the general term, usually for conducting extraordinary business

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Standard Form

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A preprinted document that gives all the legal protection required in a particular type of transaction, with blanks for selling personnel to fill in the small amount of information that varies from sale to sale.

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Stare Decisis

Back 107

adherence to past decisions or precedents

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Subjective

Back 108

actual intention of the party, rather than that party’s conduct, determines the party’s legal obligations

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Substantive Regulation

Back 109

particular contractual provisions thought to be unfair are declared unlawful

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Total Breach of Contract

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(not curable material breach) breach that is so fundamental to contract that one party essentially loses the value of what was bargained for

non-breaching party can suspend performance and sue for expectation damages

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Triable Issues

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issues that are subject or liable to judicial examination

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Undue Influence

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The improper use of power or trust in a way that deprives a person of free will and substitutes another's objective; the exercise of enough control over another person that a questioned act by this person would not have otherwise been performed, the person's free agency having been overmastered

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Unilateral Contract

Back 113

A contract in which only one party makes a promise or undertakes a performance

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Unilateral Mistake

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mistake by only one party to a contract. • A unilateral mistake is generally not as likely to be a ground for voiding the contract as is a mutual mistake.

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Unimproved Lot

Back 115

land that does not have certain basic required services necessary to utilize it for other purposes. (These include electricity, telephone, street access, or water available)

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Unreported Case

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case that has not yet been published

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Void

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as if it never existed

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Voidable

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potential to be made void by the disadvantaged party

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Warranty

Back 119

An express or implied promise that something in furtherance of the contract is guaranteed by one of the contracting parties; esp., a seller's promise that the thing being sold is as represented or promised