Chapter 10 - Business Law

contract

An agreement that can be enforced in court; formed by two or more parties, each of whom agrees to perform or to refrain from performing some act no or in the future.

implied-in-fact contract

A contract formed in whole or in part from the conduct of the parties (as opposed to an express contract)

void contract

A contract having no legal force or binding effect.

express contract

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

formal contract

A contract that by law requires a specific form, such as being executed under seal, to be valid.

informal contract

A contract that does not require a specified form or formality in order to be valid.

executed contract

A contract that has been completely performed by both parties.

executory contract

A contract that has not as yet been fully performed.

voidable contract

A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties.

unilateral contract

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

valid contract

A contract that results when elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present.

quasi contract

A fictional contract imposed on parties by a court in the interests of fairness and justice; usually, quasi contracts are imposed to avoid the unjust enrichment of one party at the expense of another.

promisee

A person to whom a promise is made.

offeree

A person to whom an offer is made.

promisor

A person who makes a promise.

offeror

A person who makes an offer.

promise

A person's assurance that he or she will or will not do something.

objective theory of contracts

A theory under which the intent to form a contract will be judged by outward, objective facts (what the party said when entering into a contract, how the party acted or appeared, and the circumstances surrounding the transaction) as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions.

bilateral contract

A type of contract that arises when a promise is given in exchange for a return promise.

unenforceable contract

A valid contract rendered unenforceable by some statute or law.

quantum meruit

Literally, "as much as he deserves" - an expression describing the extent of liability on a contract implied in law. An equitable doctrine based on the concept that one who benefits from another's labor and materials should not be unjustly enriched thereby but should be required to pay a reasonable amount for the benefits received, even absent a contract.