Contract Law Terminology - DeMars

Cards

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Condition precedent An event that must occur before an agreement (or deed or will) becomes effective.
Invitation to negotiate A request to an individual or the public to make an offer. Also called invitation to deal.
Contract implied in fact A contract that arises from the conduct of the parties rather than from their express statements.
Contract implied in law A contract imposed by law to prevent unjust enrichment. Also called quasi contract.
Bilateral contract A contract containing two promises, one made by each party to the contract.
Unilateral contract A contract containing only one promise in exchange for an act. Consideration is found in the promise of the offeror and the act of the offeree.
Voidable Capable of being disaffirmed or voided.
Nullity Nothing; as though it had not occured.
Unenforceable contract A contract that cannot be enforced for some legal reason.
Disaffirm To get out of a voidable contract; repudiate. Also called avoid.
Consideration An exchange of benefits and detriments by the parties to an agreement.
Option contract A binding promise by an offerror to hold an offer open and requires consideration from the offeree to make it binding.
Firm offer A merchant's written promise to hold an offer open for the sale of goods.
Promissory estoppel A doctrine under which no consideration is necessary when someone makes a promise that induces another's action or forebearance, and injustice can be avoided only by enforcing the promise.
Statute of Frauds Certain contracts must be in writing to be enforceable.
Parol evidence rule Oral evidence of prior or contemporaneous negotiations between the parties is not admissible in court to alter, vary, or contradict the terms of a written agreement.
Adhesion contract A contract that is drawn by one party to that party's benefit and must be accepted, as is, on a take-it-or-leave-it basis if a contract is to result.
Fraud in the inducement Fraud that induces another to enter into a contract. Voidable at the option of the injured party.
Fraud in esse contractus Fraud as to the essential nature of the transaction. Contract is void.
Usury Charging a greater amount of interest than is allowed by law.
Assignment The transfer of a right.
Novation An agreement whereby an original party to a contract is replaced by a new party, creating a completely new contract and ending the original one.
Accord and satisfaction An agreement to perform in a different manner than originally called for, and the completion of that agreed-upon performance.
Damages The monetary loss suffered by a party as a result of a wrong.
Compensatory damages Damages that compensate the plaintiff for actual losses resulting from the breach.
Punitive damages Damages as a measure of punishment for the defendant's wrongful acts. Also called exemplary damages.
Liquidated damages Damages that are agreed upon by the parties at the time of execution of the contract in the event of a subsequent breach.
Incidental damages Damages that may be awarded to the injured party to cover reasonable expenses that indirectly result from a breach of contract.
Consequential damages Losses that flow not directly from the breach but from the consequences of it.
Mitigate Lessen; keep as low as possible.