Chapter 7 – Business Law – Flashcards
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Promise
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A declaration that binds the person who makes it (the promisor) to do or not to do a certain act (pg. 193)
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Promisor
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A person who makes a promise (pg. 193)
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Promisee
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A person to whom a promise is made (pg. 193)
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Contract
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A set of promises constituting an agreement between parties, giving each a legal duty to the other and also the right to seek a remedy for the breach of the promises or duties (pg. 194)
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Object Theory of Contracts
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The view that contracting parties are bound only by terms that can be objectively inferred from promises made (pg. 195)
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Offeror
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A person who makes an offer (pg. 196)
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Offeree
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A person to whom an offer is made (pg. 196)
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Bilateral Contract
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A type of contract that arises when a promise is given in exchange for a return promise (pg. 196) **a promise for a promise**
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Unilateral Contract
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A contract that results when an offer can be accepted only by the offeree's performance (pg. 197) **performance for a promise**
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Formal Contract
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An agreement that by law requires a specific form for its validity (pg. 198)
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Informal Contract
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A contract that does not require a specific form or method of creation to be valid (pg. 198)
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Express Contract
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A contract in which the terms of the agreement are stated in words, oral or written (pg. 198)
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Implied Contract
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A contract formed in whole or in part from the conduct of the parties (pg. 198)
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Executed Contract
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A contract that has been fully performed by both parties (pg. 199)
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Executory Contract
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A contract that has not yet been fully performed (pg. 199)
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Valid Contract
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A contract that results when the elements necessary for contract formation (agreement, consideration, legal purpose, and contractual capacity) are present (pg. 199)
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Voidable Contract
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A contract that may be legally avoided at the option of one or both of the parties (pg. 199)
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Unenforceable Contract
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A valid contract rendered unenforceable by some statute or law (pg. 200)
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Void Contract
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A contract having no legal force or binding effect (pg. 200)
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Quasi Contract
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An obligation or contract imposed by law (a court), in the absence of an agreement, to prevent the unjust enrichment of one party (pg. 200)
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Agreement
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A mutual understanding or meeting of the minds between two or more individuals regarding the terms of a contract (pg. 202)
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Offer
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A promise or commitment to perform or regain from performing some specified act in the future (pg. 202)
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Revocation
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The withdrawal of a contract offer by the offeror. Unless an offer is irrevocable, it can be revoked at any time prior to acceptance without liability (pg. 206)
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Counteroffer
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An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer (pg. 207)
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Mirror Image Rule
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A common law rule that requires that the terms of the offeree's acceptance adhere to exactly to the terms of the offeror's offer for a valid contract to be formed (pg. 207)
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Option Contract
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A contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration for the offer to remain open). (pg. 208)
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Acceptance
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The act of voluntarily agreeing, through words or conduct, to the terms of an offer, thereby creating a contract (pg. 208)
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Mailbox Rule
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A common law rule that acceptance takes effect, and thus completes formation of the contract, at the time the offeree sends or delivers the acceptance via the communication mode expressly or impliedly authorized by the offeror (pg. 210)
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E-Contract
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A contract that is formed electronically (pg. 210)
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Forum-Selection Clause
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A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract (pg. 212)
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Click-On Agreement
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An agreement that arises when an online buyer clicks on "I agree" or otherwise indicates her or his assent to be bound by the terms of an offer (pg. 213)
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Shrink-Wrap Agreement
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An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged (pg. 213)
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Browse-Wrap Term
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A term/condition of use that is presented when an online buyer downloads a product but that the buyer does not have to agree to before installing or using the product (pg. 214)
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E-Signature
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An electronic sound, symbol, or process attached to or logically associated with a record and adopted by a person with the intent to sign the record
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Record
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Information that is either inscribed on a tangible medium or stored in an electronic or other medium and is retrievable (pg. 215)
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Consideration
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The value given in return for a promise or performance in a contractual agreement (pg. 216)
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Forbearance
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The act of refraining from an action that one has a legal right to undertake (pg. 216)
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Rescission
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A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made (pg. 218)
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Past Consideration
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An act that took place in the past and that ordinarily, by itself, cannot be consideration for a later promise to pay for the act (pg. 218)
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Accord and Satisfaction
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A common means of settling a disputed claim, whereby a debtor offers to pay a lesser amount than the creditor purports to be owed (pg. 219)
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Liquidated Debt
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A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined (pg. 219)
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Release
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An agreement in which one party gives up the right to pursue a legal claim against another party (pg. 219)
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Covenant Not to Sue
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An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim (pg. 219)
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Promissory Estoppel
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A doctrine that can be used to enforce a promise when the promisee has justifiably relied on it and when justice will be better served by enforcing the promise (pg. 220)
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Estopped
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Barred, impeded, or precludded (pg. 220)
