Business Law Test 2 - Contracts
mutual agreement
A "meeting of the minds" regarding the rights and obligations of the parties to a contract.
mistake
A belief not in accord with the facts that may be concerned with the nature of the subject matter or the quality of the subject matter.
request for a proposal
A call for a bid or estimate for materials to be furnished or work to be done.
material alteration
A change of an important term in a contract that affects the rights or obligations of the parties.
contract of adhesion
A contract characterized by unequal bargaining power of the parties.
antenuptial or prenuptial agreement
A contract containing promised made by persons planning to marry.
personal-service contract
A contract in which services that require a unique skill, talent, ability, or the like are provided by a specific person.
unconscionable contract
A contract regarded as shockingly unfair and unjust.
voidable contract
A contract that allows the incompetent party to withdraw.
executed contract
A contract that has been fully completed by both parties.
executory contract
A contract that has not yet been completed by both parties.
oral contract
A contract that is created entirely through conversation of the parties involved.
implied contract
A contract that is understood from the acts or conduct of the parties.
void contract
A contract that lack an essential element and hence was never legally a contract.
express contract
A contract whose meaning is not determined by the conduct of the parties.
entire, or indivisible, contract
A contract with several related parts, each dependent on the other parts for satisfactory performance.
divisible contract
A contract with several unrelated parts, each of which can stand alone.
restraining order or injunction
A court decree that prohibit the performance of a certain act.
specific performance
A court order that directs that a certain act be carried out.
moral consideration
A demand of the conscience based on love, friendship, honor, or sympathy.
franchisor
A government or parent firm that grants a monopoly to another.
government-granted franchise
A legal monopoly granted to a firm or person to conduct a specific business such as a railroad or electric company.
puffing
A mere expression of opinion.
abandonment
A minor's surrender of the special protection given to him or her by the law.
counteroffer
A new and different response to an offer.
assignor
A party to a contract who transfers his or her rights to a third party.
third-party beneficiary
A party who would benefit from the performance of a contract, but for whom the contract is not created.
auctioneer
A person who conducts sales of articles in which individuals bid against one another.
minor
A person who has not yet reached the age of majority.
competent parties
A person who is of legal age and normal mentality.
mailbox rule
A principle that states that an acceptance sent via the postal system or by courier is effective when sent.
pledge or subscription
A promise to contribute to a charitable organization.
barren promise
A promise to do what one is all ready required to do.
guaranty
A promise to pay the debts or settle the wrongdoings of another.
proper form
A requirement for contracts for the sale of good for $500 or more.
novation
A significant change in a contract that is made with the mutual consent of all parties.
exculpatory clause
A statement in a contract that released one party from liability resulting from his or her own negligence throughout the performance of a contract.
general release
A written agreement to give up a claim or settle a debt for less than the amount demanded.
memorandum
A written contract or agreement.
formal contract
A written contract that bears a seal.
promissory note
A written promise to pya a specified sum of money.
restraint of trade
Actions or agreements intended to suppress or eliminate competition.
ratification
Affirming, or agreeing to, the terms of a contract entered into previously.
acceptance
Agreement to a proposal or an offer.
gambling agreement
An agreement based on the uncertain outcome of some future event.
champerty
An agreement by a person to courage or support a lawsuit in which he or she has no legitimate interest.
unlicensed transaction
An agreement with a person who is required to have, but lacks, that proves of the state to practice his or her business, profession, or occupation.
guarantor
An assignor who guarantees or stands behind an assignment.
preexisting duty
An obligation to perform actions that are all ready required.
tender of payment
An offer of payment made to fulfill the terms of a contract.
gratuitous promise
An offer to confer a benefit on someone without requiring a sacrifice in return.
public offer
An offer to late groups of people, only one of whom can accept.
past consideration
An offer to pay for a benefit that has all ready been received.
tender of performance
An offer to perform acts required by a contract.
incidental beneficiary
An outside party for whose benefit a contract is made by other parties.
assignee
An outside party to whom contract right are transferred.
anticipatory breach
Cancellation of a contract due to an announcement of intention to breach prior to the time performance is due.
duress
Domination of a person's will by force or by threat of force or injury.
impossibility of performance
Inability to fulfill the terms of a contract due to unforeseen circumstances.
fraud
Intentional misstatement of a material fact.
necessaries
Items considered essential for a person's well-being, such as food, shelter, clothing, medical care, and employment.
real property
Land and items that are permanently attached to it.
personal property
Property other than land and items permanently attached to it.
intentional concealment
Purposely not disclosing material facts to a contracting party.
age of majority
Statutory legal age.
contractual capacity
The ability of a party to make a contract.
monopoly power
The ability to control the market in particular area or for a certain product.
disaffirmance
The act of canceling a voidable contract.
forbearance
The act of refraining from exercising a legal right.
interest
The charge for the use of borrowed money.
substantial performance
The completion of a contract except for some small details.
mitigation
The duty of an injured party to lessen the amount of damages.
Statute of Frauds
The law that requires certain types of contracts to be in writing.
revocation
The offeror's rescinding of an offer that has never been accepted by the offeree.
promisee
The party to an agreement who receives a promise.
offeree
The party to whom an offer is made.
administrator
The personal representative appointed by a court to distribute the assets of the estate of the deceased.
executor
The personal representative named in a will to distribute the assets of the estate of the deceased.
parol evidence rule
The point of law that prevents oral changes to a written contract from being legally enforceable.
undue influence
The power to control the actions of another that results from a special or confidential relationship.
usury
The practice of charging a higher interest rate than that permitted by law.
invitation to trade
The prevailing legal view of a newspaper advertisement.
consideration
The promise (take/receive) exchanged by parties to a contract.
lapse of time
The reason for termination of an offer that has not been accepted by the offeree within the time limits specified.
legality of purpose
The requirements that a contract cannot violate the law.
emancipation
The state of a minor who has married and/or left home that renders the minor responsible for his or her contracts.
bankrupt
The state of a person or firm recognized to be unable to pay obligations.
assignment
The transfer of contract rights by one of the parties.
delegation
The transfer of duties to a third party by a party to a contract.
misrepresentation
Unintentional misstatement of a material fact.
incompetence
legal incapacity to make a binding contract.
offeror
the person who makes an offer.
