Chapter 7 Essentials of Business Law

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contract
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a legally enforceable agreement that is created when two or more competent parties agree to perform or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements.
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tangible personal property
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personal property that can be moved.
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Offer
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a proposal made by one party (the offender) to another party (the offeree) that indicates a willingness to enter into a contract.
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offeror
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the person making a proposal.
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offeree
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the person to whom a proposal is made.
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acceptance
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an indication made by the offeree that he or she agrees to be bound by the terms of the offer.
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mutual agreement
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the state of mind that exists between an offeror and an offeree when a valid offer has been accepted, and the parties know what the terms are and have agreed to be bound by them. aka” a meeting of the minds”
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consideration
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the promise to give up something of value that a party to a contract has a legal right to keep or to do something that the party is not otherwise legally required to do.
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competent
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being mentally capable of understanding the terms of a contract.
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legality of purpose
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the requirement that the intent of a contract be legal for the contract to be enforceable.
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proper form
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the requirement that the form of a contract be correct for the terms of the contract to be enforceable.
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oral contract
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an agreement that is not in writing or signed by the parties.
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written contract
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an agreement that is reduced to writing on a permanent surface.
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express contract
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a contract that explicitly states the agreement of the parties, either orally or in writing.
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implied contract
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a contract that does not explicitly state the agreement of the parties but in which the terms of the agreement can be inferred from the conduct of the parties, the customs of the trade or the conditions or circumstances.
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formal contract
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a specialty contract that is written and under seal.
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simple contract
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an informal contract made without seal -even though the subject matter of the contract may be extremely complex and may involve huge amounts of money.
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entire contract
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an agreement that is made up of two or more parts, in which each part is dependent upon the others.
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divisible contract
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an agreement that is made up of two or more parts, each part being independent of the others.
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executory contract
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an agreement in which some future art or obligation remains to be performed under its terms.
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executed contract
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a record of an agreement that has been completed in all respects by all the parties.
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valid contract
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an agreement resulting in an obligation that is legally enforceable.
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void contract
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a contract that is not enforceable from the beginning because it lacks one of the requirements of a valid contract.
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voidable contract
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an agreement that can be rejected by one of the parties for a legally acceptable reason.

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