Chapter 6- Contract Law

Infancy Doctrine

A legal doctrine that allows minor to disaffirm contracts

Private Law

A legally binding agreement between consenting parties that does not apply to the public at large

Contract

A legally enforceable promise

Uniform Commercial Code (UCC)

A model statue that seeks to provide uniformity to contract law among the different states. It is not a law until state legislatures adopt it as a law.

Implied Covenant

A promise the law requires in all contracts, regardless of whether the parties state it or not.

Counteroffer

A rejection of an offer. It is a new offer.

Personal Satisfaction

A standard of performance in a contract that means the performance under the contract is scrutinized subjectively, either by a party to the contract or by a third-party beneficiary specified in the contract

Strict Performance

A standard of performance in a contract that requires perfect performance.

Illusory Promise

A statement that looks like a promise but is actually only an illusion of a promise due to its conditional nature or its otherwise lack of a firm commitment.

Statue of Frauds

A statue that requires certain types of contracts to be in writing to be enforceable

Legal Purpose

An essential element of contract formation. The subject matter of a contract must have a lawful purpose consistent with public policy. If the subject matter of a contract does not have a legal purpose, contract formation will fail

Reasonable person standard

An objective standard based on reasonableness, against which actions are measured to determine sufficiency

Complete Performance

Full and perfect performance of the promises, obligations, and duties contained in a contract.

Void/Voidable

Refers to a contract that is not valid on its face because it suffers from some fatal flaw. Refers to the status of a contact that may be terminated due to some defect.

Breach

The failure to perform duties and obligations required by contract

Capacity

The legal ability to enter into a contract

Mirror Image

The requirement for acceptance in common-law contract; it means that the acceptance must be precisely the same as the offer

Revocation

The retraction of an offer before it is accepted.

Substantial Performance

The standard for service contracts.

Performance

Undertaking the legal duties imposed on us by terms of the contract

Invitation to bargain

When a party invites others to make offers to buy; advertisements are a prevalent example.

Discharged

When parties to a contract have fulfilled their duties under the contract and they are released from further requirements to perform under the contract

Good Faith

Without deception; honest

Consideration

A bargained-for exchange

Noncompete Clause

A contract clause that restricts competition for a specified period of time, within a certain geographic region, and for specified activities

Bilateral Contract

A contract in which both parties make a promise

Unilateral Contract

A contract in which the accepting party may accept only through an action

Damages

Compensable loss

Terms

Elements of contracts that specify important matters, such as quantity, price, and time for performance

Offer

In common law, it creates the power of acceptance in another party and includes the agreement's essential elements, which must be definite and certain.

Acceptance

In common law, it must be a mirror image of the offer

Mutual Assent

In common-law contracts, comprises offer and acceptance

Formation

In common-law, this refers to offer, acceptance, and consideration

Gap fillers

In contracts governed by the UCC, terms that can be inserted into a contract when those terms are not definite and certain.