Glossary of Contracts in Business Law
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- bilateral contract
- A contract formed when a promise is given in exchange for a promise
- capacity (to contract)
- required to have legal standing to enter into a valid contract. requires competency and adult age.
- consequential damages
- recoverable in court as a result of a breach of contract that the seller should have known about and that could not be avoided by the buyer through cover. Also, damages that do not occur immediately or directly from a contract breach but may be reasonably foreseeable as occurring subsequently "as a consequence" of the breach. Lost profits are a frequently claimed form of consequential damages.
- This is the thing or act of value provided in exchange for a promise, which is required for a valid contract to be formed.
- An agreement that can be enforced by law. Not all agreements
- executed contract
- A contract under which the duties called for from the contracting parties have been fully performed.
- executory contract
- A contract that calls for future performance, not yet completed.
- express contract
- A contract based on an explicit agreement, written or oral, between contracting parties.
- fraudulent misrepresentation (fraud)
- A deliberate misrepresentation of material facts, knowingly provided with the intent of deceiving another and in a form that a reasonable person could rely on to his or her detriment, in order to gain an advantage.
- illusory promise
- Agreements that appear to contain consideration but that, in fact, do not because the promises do not impose legal detriments on the promisors.
- implied contract
- A contract formed in part or in whole based on the conduct of the parties.
- Condition or situation that relieves a party to a contract from performance of the duties called for in the contract when, through no fault of the contracting parties, performance would be objectively impossible or highly impracticable.
- A court order commanding that a party do something, stop doing something, or not do something that could cause irreversible harm to the other party.
- legal detriment
- real burden that qualifies as consideration provided by a party to a contract. May involve a promise to pay money, to deliver services or products, or to refrain from certain actions (such as suing another designated party).
- liquidated damages
- A damage amount, agreed to within a contract by the contracting parties, that represents a reasonable value for a damage award in the event of a contract breach.
- material breach
- Failure of a party to a contract, when there is no legal excuse for that failure, to perform his or her duties under the contract so that the essential purpose of the contract is unfulfilled.
- mitigation of damages
- Actions taken, which are reasonable, to offset or minimize damages incurred due to a contract breach.
- Substitution, by agreement, of a new contract for a previous contract, generally with the substitution of a new party to the contract in place of a previous contracting party.
- parol evidence rule
- Court rule that excludes evidence on parties' prior or current discussions, negotiations, statements, or oral arguments if that evidence is at odds with the express terms of the particular contested contract.
- promissory estoppel
- This is the doctrine that assures that a promise (offer) will be binding as, otherwise, an offeree would be harmed by relying on a promise made.
- An assumed contract, imposed by courts in the interest of fairness, generally to prevent the unjust enrichment of one party at the expense of another.
- A contract remedy in which each party to the contract, upon cancellation of a contract, must give back what was transferred in the contract to return the contracting parties to their precontract status.
- unconscionable contract
- An agreement that is void at law because it requires one party, generally with limited bargaining power, to accept terms that are unfair and that, symmetrically, unfairly benefit the party with superior bargaining power.
- unilateral contract
- A contract formed when one promisor offers terms that can be accepted only by an offeree's performance.
- usury laws
- State laws that set ceilings, that is, maximum limits, on the interest rates that can be charged on loan contracts.
- adhesion contract
- overwhelming power of one to sign contract
- Uniform Commercial Code
- Make business uniform. All states adhere except LA
- Article 2 (UCC)
- Provides flexible rules for contracting well suited to large number of fast paced sales transactions occuring daily
- wrongful threat by words or conduct that induces fear on the part of the person threatened as to overcome his free will.
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