• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

Card Range To Study



Play button


Play button




Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

193 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
A person's assurance that the person will or will not do something
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 as a duty.
Requirements for a valid contract
1. Agreement
2. Consideration
3. Contractual Capacity
4. Legality
one party offers to enter into a legal contract and another party must accept the terms of the offer
promises made by the parties to the contract must be supported by legally sufficient and bargained for consideration(something of value received or promised)
Contractual Capacity
both parties must be recognized by law as possessing characteristics that qualify them competent parties
contracts purpose must be to accomplish some goal that is legal and not against public policy
Defenses to the enforceability of a contract
1. Genuineness of Assent
2. Form
Genuineness of assent
apparent consent of both parties must be genuine. A contract formed as a result of fraud may not be enforceable
contract must be whatever form the law requires, some must be in writing
Bilateral contract
a promise for a promise
unilateral contract
a promise for an act
Formal contracts
contracts that require a special form or method of creation to be enforceable
Contracts under seal
involves formalized writing with a special seal
Letters of credit
agreements to pay contingent on the purchaser's receipt of invoices and bills of lading
Informal contracts
no special form is required, usually based on substance rather than form
Implied in fact contract
implied from the conduct of the parties
Requirements of an implied in fact contract
1. The plaintiff furnished some service or property
2. The plaintiff expected to be paid for the service or property and the defendant knew or should have known.
3.The defendant had a chance to reject the service or property and did not.
Executed contract
a contract that has been fully performed on both sides
Executory contract
contract that has not been fully performed
Valid contract
has the elements necessary to entitle at least one of the parties to enforce it in court
voidable contract
a valid contract, but one that can be avoided at the option of one or both of the parties
unenforceable contract
a contract that cannot be enforced because of certain legal defenses against it.
void contract
is no contract at all- no legal obligations
Quasi contracts
contracts implied in law, are not actual contracts. Fictional contracts created by courts and imposed on parties in the interests of fairness and justice
Objective theory of contracts
a party's intention to enter into a legally binding agreement or contract is judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's own secret
subjective intentions
an essential element for contract formation, the parties must agree on the terms of the contract and manifest to each other their mutual assent to the same bargain.
a promise or commitment to do or refrain from doing some specified thing in the future
3 elements of an effective offer
1. The offeror must have a serious intention to become bound by the offer
2. The terms of the offer must be reasonably certain or definite, so that the parties and the court can ascertain the terms
3. The offer must be communicated to the offere
Expressions of opinion
not an offer, does not indicate an intention to enter into a binding agreement
statements of future intent
a statement of an intention to do something in the future is not an offer.
Preliminary Negotiations
a request or invitation to negotiate is not an offer, it only expresses a willingness to discuss the possibility of entering into a contract
Agreements to agree
agreements to agree to the material terms of a contract at some future date- not considered to be binding contracts
treated as invitations to negotiate
a seller offers goods for sale through an auctioneer, but this is not an offer to form a contract
A contract must include:
1. The identification of the parties
2. The identification of the object or subject matter of the contract, including the work to be performed with specific identification of such terms as goods, services and land.
3. the consideration to be paid
4. the time of payment, delivery or performance
offerors act of withdrawing (revoking) an offer
Irrevocable offer
contracts that cannot be cancelled or revoked
option contract
created when an offeror promises to hold an offer open for a specified period of time in return for a payment given by an offeree
Promissory estoppel
estop means to bar, impede, or preclude someone from something
Rejection of the offer by the offeree
if offeree rejects the offer, the offer is terminated
counter offer
a rejection of the original offer and the simultaneous making of a new offer
Mirror image rule
requires the offeree's acceptance to match the offeror's offer exactly - to the mirror the offer
Termination by operation of law
1. Lapse of time
2. Destruction of the specific subject matter of the offer
3. Death or incompetence of the offeror or the offeree
4. Supervening illegality of the proposed contract
Mailbox rule
if the authorized mode of communication is the mail, then acceptance becomes valid when dispatched, not when received by the offeror.
Oral contracts
are valid, but have a hard time proving contracts without written evidence. Contracts in written form in order to give evidence when parties disagree.
Supervening Illegality
when a statute or court decision makes the proposed contract illegal, the offer automatically terminates.
unequivocal acceptence
mirror image rule, must agree without constraints or conditions
the value given in return for a promise or in return for a performance
Legally sufficient value
1. a promise to do something that one has no prior legal duty to do
2. the performance of an action that one is otherwise not obligated to do
3. Forbearance: refraining from an action that one has legal right to undertake.
Bargained for exchanged
the promise given by the pormisor must induce the promises to offer a return promise, performance or a forbearance, and the promisee's promise, performance or forbearance must induce the promisor to make the promise.
Pre-existing Duty
a promise to do what one already has a legal duty to do does not constitute legally sufficient consideration.
Unforseen difficulties
exception to pre existing duty
unmaking of a contract so as to return the parties to the position's they occupied before the contract was made
Past consideration
no consideration, promises made in return for actions or events that have already taken place are unforceable
Illusory Promises
if terms of the contract express such uncertainty of performance that the promisor has not definitely promised to do anything- without consideration and unenforceable
Requirements contracts
a buyer and a seller agree that the buyer will purchase from the seller all the goods of a designated type that the buyer needs or requires
Output contract
the buyer and seller agree that the buyer will purchase from the seller all of what the seller produces, or the seller's output
accord and satisfaction
involves a debtor's offer of payment and a creditor's acceptance of a lesser amount that the creditor originally claimed was owed
liquidated debts
if a debt is liquidated accord and satisfaction cannot take place
a contract in which one party forfeits the right to pursue a legal claim against the other party
covenant not to sue
an agreement to substitute a contractual obligation for same other type of legal action based on a valid claim.
exceptions to the consideration requirement
1. promises that induce detrimental reliance under the doctrine of promissory estoppel
2. promises to pay debts that are barred by a statue of limitations
3. promises to make charitable contributions
Requirements to state a claim by promissory estoppel
1. There must be a clear and definite promise
2. The promisor should have expected that the promisee would rely on the promise
3. the promisee reasonably relied on the promise by acting or refraining from some act
4. the promisees reliance was definite and resulted is subtantial detriment
5. enforcement of the promise is necessary to avoid injustice
Silence in not an acceptance
Contractual capacity
must be held by the parties of the contract in order for that contract to be valid
age of majority
when a person is no longer a minor for contractual purpose is 18 years old.
when a child's parent or legal guardian relinquishes the legal right to exercise control over the child
the legal avoidance or setting aside of a contractual obligation - a minor must express his or her intent through words or conduct, not to be bound to the contract
items that fulfill basic needs
the act of accepting and giving legal force to an obligation that previously was not enforceable
misrepresentation of age prohibits the right of disaffirmant
a person sufficiently intoxicated to lack of mental capacity, the contract may be voidable. If person understood contract it is still enforceable
mental incompetence
if a court has declared a person to be mentally incompetent, any contract made by that person is void from the outset
Contracts to commit a crime
a contract in violation of a statute are not enforceable
when a lender makes a loan at an interest rate above the lawful maximum interest rate
Sabbath laws
prohibit the formation of performance of certain contracts on a Sunday
Blue Laws
from the blue paper on which New Haven CT printed its town ordinance in 1781 that prohibited work and required businesses to close on Sunday
Contracts in restraint of trade
adversary affect public policy that favors competition in the economy
Covenant not to compete
ancillary clauses in contracts concerning the sale of an ongoing business. Created when a seller agrees not to open a new store in a certain geographical area surrounding an existing store.
unscrupulous or grossly unfair
Adhesion contract
a contract written exclusively by one party (the dominant party, usually the sller or creditor) and presented to the other (the adhearing party, usually the buyer or borrower) on a take-it-or-leave-it basis - no negotiation
Substantive unconscionability
contracts or portions that are oppressive or overly harsh
exculpatory clauses
clauses that release a party from liability in the event of monetary or physical injury no matter who is at fault
in paridelicto
equally at fault
Discriminatory contracts
party promises to discriminate on the basis of race, color, national origin, religion, gender, age, or disability are contrary to both statute and public policy unenforceable
or divisible consists of distinct parts that can be performed separately, with separate consideration provided for each part
Lucid interval
people have periods of lucid thought and action, within a normally non-lucid period in life.
dying declaration
person is about to die and make a declaration, law presumes they are correct, people don't lie on their death bed.
Legal capacity
anybody who understands what it means to make a keep a promise
Mistakes of fact
a bilateral or mutual mistake occurs when both parties are mistaken as to an existing material fact - a fact important to the subject matter of the contract. only a mistake of fact may allow a contract to be avoided
unilateral mistake of fact
when only one party is mistaken on a material fact
Mistakes of value
if a mistake concerns the future market value or quality of the object of the contract. Can be bilateral or unilateral - do not serve as a basis for avoiding a contract.
Fraudulent misrepresentation
refers to the misrepresentation that is consciously false and is intended to mislead another
1. a misrepresentation of a material fact must occur
2. there must be an intent to deceive
3. the innocent party must justifiably rely on the misrepresentation
misrepresentation by concealment
when one party takes specific action to conceal a fact that is material to the contract
Misrepresentation of law
does not ordinarily entitle a party to relief from a contract
misrepresentation by silence
contract cannot be set aside because certain pertinent info is not volunteered
duty to prospective employees
duty to disclose information may arise in an employment context, when an employer either misrepresentation or conceals information prospective employees
intent to deceive
scienter - "guilty knowledge"
if a party knows a fact is not as stated
Innocent misrepresentation
if a person makes a statement that they believe to be true, but that actually misrepresents material facts
negligent misrepresentation
if a person fails to exercise reasonable care in uncovering or disclosing the facts or does not use the skill and competence that their business or profession requires
undue influence
arises from special kinds or relationships in which one party can greatly influence another party, thus overcoming that party's free will.
Genuineness of assent
an examination of the apparent agreement by the court to determine if the parties truly intended to be bound by the agreement
fiduciary duty
have to look out for someone else and not yourself
Statue of Frauds
certain agreements are required by law to be in writing
Contracts that fall within the statue of frauds
1. contracts involving interests in land
2. Contracts that cannot by their terms be performed within one year from the day after the date of formation
3. Collateral or secondary contracts such as promises by the administrator or executor of an estate to pay a debt of the estate personally that is, out of her or his own pocket
4. promises made in consideration or marriage (prenups)
5. Under the uniform commercial code (UCC) contracts for the sale of goods priced at $500 or more
Collateral promises
or secondary promise is one that is ancillary (subsidiary) to a principle transaction or primary contractual relationship
Primary Obligations
one which is the principal object of the contract
Secondary Obligations
Incidental obligation (such as payment of damages upon failure to perform) that proceeds from the primary obligation of a contract or transaction.
Prenuptial agreements
agreements made before marriage that define each partners ownership rights in the other partner's property.
Parol evidence rule
is a court finds that the parties intended their written contract to be a complete and final statement of their agreement the it will not allow either party to present parol evidence (testimony or other evidence of communications between the parties that are not contained in the contract itself)
exceptions to Parol evidence rule
1. contracts subsequently modified. Evidence of any susquent modification (oral or written) of a written contract can be introduced into court.
2. Voidable or void contracts
3. contracts containing ambiguous terms
4. incomplete contracts
5. prior dealing, course of performance, or usage of trade
6. contracts subject to an orally agreed on condition precedent
7. Contracts with an obvious or gross clerical (or typographic) error that clearly would not represent the agreement of the parties.
Integrated contracts
determining whether evidence will be allowed basically depends on whether the written contract is intended to be a complete and final statement of the terms of the agreement. If it is so intended it is referred to as an integrated contract.
General Rule
Oral agreements are just as valid as written agreements
only issue is with evidential proof
One year rule
A contract that cannot by its own terms be performed within one year from the day after the contract is formed must be in writing to be enforceable
Privity of contract
a contract is a private agreement between the parties who have entered into it and traditionally these parties alone have rights and liabilities under the contract
the transfer of contractual rights to a 3rd party
the transfer of contractual duties to a 3rd party
the person to whom a duty or obligation is owed
the person who is obligated to perform the duty
contract prohibits assignment
1. a contract cannot prevent an assignment of the rights to receive monetary payments
2. Assignment or rights in real estate often cannot be prohibited b/c such a prohibition is contrary to public policy
3. The assignment of negotiable instruments cannot be prohibited
4. in a contract for the sale of goods, the right to receive damages for breach of contract or payment of an account awed may be assigned even though the sales contract prohibits such an assignement
party making the delegation
party to whom the duty has been delegated
duties that cannot be delegated
1. duties personal in nature
2. when performance by a 3rd party will vary materially from that expected by the obligee
3. when the contract prohibits delegation
Third party beneficiary
when original parties in contract intend at the time of contract the the performance directlty denefits a 3rd party
Intended beneficiary
has legal rights and can sue the promisor directly for breach of contract
rights have taken effect and cannot be taken away
when do 3rd party rights vest
1. the 3rd party materially changes his or her position in justifiable reliance on the promise
2. the 3rd party brings a lawsuit on the promise
3. the 3rd party demonstrates her or his consent to the promise at the request of the promisor or promisee.
Incidental beneficiary
unintentional benefits from a contract cannot sue to enforce contract
has something involved, can lose something
to terminate one's contractual duties
completing the contractual duties
a possible future event, the occurrence or non occurrence or which will trigger the performance of a legal obligation or terminate on existing obligation under a contract
condition subsequent
when a condition operates to terminate a party's absolute promise to perform
concurrent conditions
occur only when the contract calls for the parties to perform their respective duties simultaneously
express conditions
are provided for by the parties agreement prefaced with if provided after or when
implied in fact conditions
similar to express in that they are understood to be part of the agreement but they are not found in the express language
in an unconditional offer to perform by a person who is ready, willing and able to do so
complete performance
when a party exactly as agreed, there is no question as to whether the contract has been performed
substantial performance
when a party who in good faith performs substantially all the terms of the contract, can enforce the contract against the other party
breach of contract
the non performance of a contractual performance
anticipatory repudiation
before either party has a duty to perform one of the parties may refuse to carry out his or her contractual obligations
mutual rescission
the parties must take another agreement that also satisfies the legal requirements for a contract
occurs when both of the parties to a contract to substitute a third party for one of the original parties
1. a previous valid obligation
2. an agreement by all the parties to a new contract
3. the extinguishing of the old obligation
4. a new contract that is valid
substantial agreement
2 original parties to the contract from a different agreement to substitute for the original one
Discharge in bankruptcy
enforcement of most of the debtor's contracts by the creditors
impossibility of performance
supervening events may make performance impossible in an objective sense.
commercial impracticability
the anticipated performance must become significantly more difficult or costly than originally contemplated at the time the contract was formed.
frustration of purpose
a contract will be discharged if supervening circumstances make it impossible to attain the purpose both parties had in mind when making the contract
compensation for a party harmed as a result of another's wrongful act
compensatory damages
to cover losses and costs
consequential damages
to cover indirect and foreseeable losses
punitive damages
to punish and deter wrongdoing
nominal damages
to recognize wrongdoing when no monetary loss is shown
Incidental damages
expenses that are caused directly by a breach of contract - such as incurred to obtain performance from another source
mitigation of damages
when a breach of contract occurs the innocent injured party is held to a duty to mitigate or reduce the damages that he or she suffers
Liquidated damages provision
specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract
specifies a certain amount to be paid in the event of a default or breach of contract and is designed to penalize the breaching party
Court will ask 2 questions about penalty
1. when the contract was entered into was it apparent that damages would be difficult to estimate in the event of a breach?
2. was the amount set as damages a reasonable estimate and not excessive
to rescind a contract both parties must make restitution to each other by returning good property or funds previously conveyed.
specific performance
calls for the performance of the act promised in the contract
is an equitable remedy used when the parties have imperfectly expressed their agreement in writing
requirements of a Quasi contract
1. the party has conferred a benefit on the other party
2. the party conferred the benefit with reasonable expectation of being paid
3. the party did not act as a volunteer in conferring the benefit
4. the party receiving the benefit would be unjustly enriched by retaining the benefit w/out payment
to bestow
the knowing relinquishment of a legal right
contract entered into electronically
forum-selection clause
which indicates the forum or place for the resolution of any dispute arising under the contract
click-on agreement
when an online buyer indicates their assent to be bound by the terms of the offer by clicking on some on-screen prompt
shrink-wrap agreements
an agreement whose terms are expressed inside a box in which the goods are packaged
browse-wrap terms
do not require an internet user to assent to the terms before, say downloading or using software
an electronic sound, symbol, or process attached to or logically associated with a record and executed or adapted by a person with the intent to sign the record
Uniform electronic transactions act - declares that a signature may not be denied legal effect or enforceability solely because it is in electronic form
E-SIGN act
same as UETA, does not apply to all documents court papers, divorce decrees, evictions, foreclosures, health insurance, terminations, pre-nups, and wills
partnering agreements
a seller and a buyer who frequently do business with each other agree in advance on the term and conditions that will apply to all transactions subsequently conducted electronically
refers to the procedures that may be used to ensure that the same person sending an electronic record is the same person whose e-signature accompanies the record
UETA provides that this requirement is satisfied by the electronic signature of a notary public or other person authorized to verify signatures
any mark that evidences your intent to be bound
UCC Article 2
Sales contracts - contracts for the sales of goods when conflict arises btwn common law contract rule and UCC - the UCC controls except when it is silent and common law governs
the passing of title from the seller to the buyer for a price
an item of property must be tangible and movable tangible property has physical existence, it can be touched or seen. Good must be movable, therefore real estate is excluded
predominant factor test
to determine whether a contract is primarily for the sale of goods or for the sale of services
when he or she acting in a mercantile capacity possesses or uses an expertise specifically related to the goods being sold
Lease agreement
a lessor and lesee's bargain with respect to the lease of goods and found in their language and as implied by other circumstances
consumer leases
1. lessor who regularly engages in the business of leasing
2. a lessee who leases the goods promarily for a personal family or household purpose
3. total lease payments that are less than 25,000
Finance leases
involves a lessor, lessee and a supplier. the lessor buys the leases goods from a supplier and leases or subleases them to the lessee
Requirements contract
the buyer agrees to purchase and the seller agrees to sell all or up to stated amount of what the buyer needs or requires
output contract
the seller agrees to sell and the buyer agrees to buy up all or up to a stated amount of what the seller produces
firm offer
arises when a merchant -offeror gives assurances in assigned writing that the offer will remain open
course of dealing
is a sequence of previous actions and communications btwn parties to a particular transaction that establishes a common basis for their understanding
usage of trade
as any practice or method of dealing having such regularity of observance in a place vocation or trade as to justify an expectation that will be observed with the respect to the transaction in question.
governs international contracts only countries have ratified CISG
choice of language clause
designates the official language by which the contract will be interpreted in the event of a disagreement
Force-majeure clause
stipulate that in addition to acts of God a number of other eventualities may excuse a party from liability for nonperformance