Module 2: Contracts II Flashcards Preview

MOS 2275: Business Law > Module 2: Contracts II > Flashcards

Flashcards in Module 2: Contracts II Deck (38)
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1

voidable contract

a contract that, in certain circumstances, an aggrieved party can choose to keep in force or bring to an end

2

void contract

a contract involving a defect so substantial that it is of no force or effect

3

legal capacity

the ability to make binding contracts (must not be a minor, must have mental capacity)

4

economic duress

the threat of economic harm that coerces the will of the other party and results in a contract - voidable at the option of the party who was victim to duress

5

undue influence

unfair manipulation that compromises someone's free will or choice: includes actual pressure and presumed pressure (based on relationship)

6

unconscionable contract

an unfair contract formed when one party takes advantage of the weakness of another; 2 elements: there must be substantially unequal bargaining power, and terms of contract must be grossly unfair . almost like fraud / exploitation

7

misrepresentation

a false statement of fact that causes someone to enter a contract

8

rescission

the remedy that results in the parties being returned to their pre-contractual positions

9

fraudulent misrepresentation

speaker has a deliberate intent to mislead or make the statement recklessly without knowing or believing that it is true

10

negligent misrepresentation

speaker makes the statement carelessly or negligently

11

innocent misrepresentation

speaker has not been fraudulent or negligent, but has misrepresented a fact. by process of elimination, the misrepresentation is merely innocent

12

mistake

an error made by one or both parties that seriously undermines a contract; most common type is a mutual mistake

13

common mistake (aka mutual mistake)

both parties, without fault, are mistaken about an ESSENTIAL TERM of the contract (fundamental assumption)

14

rectification

a remedy available where parties have made a mistake in recording their agreement and based on establishing the specific terms actually agreed to; typographic or clerical mistake

15

non-solicitation clause

a clause forbidding contact with the business's customers

16

non-competition clause

a clause forbidding competition (no-compete)

17

vicarious performance

performance of contractual obligations through others

18

novation

the substitution of parties in a contract or the replacement of one contract with another

19

termination by frustration

contract is terminated on the basis that work that was to be performed is simply impossible

20

privity of contract

there is a contract between the parties as intended (can only be a breach of contract if concerning the parties in the contract)

21

condition

if breached, innocent party has right to terminate the contract and claim damages

22

warranty

minor term that if breached, gives innocent party right to claim damages only (not terminate)

23

innominate term

a term that cannot easily be classified as either a condition or a warranty

24

anticipatory breach

a breach that occurs before the date for performance

25

damages

monetary compensation for breach of contract or other actionable wrong

26

expectation damages

damages that provide the plaintiff with the monetary equivalent of contractual performance

27

punitive damages

an award to the plaintiff to punish the defendant for malicious, oppressive, and high-handed conduct

28

test for remoteness

damages must have been anticipated or having "Arisen naturally" from the breach, or if difficult to anticipate, are reasonably foreseeable because those unusual circumstances were communicated upfront (i.e. the $50mil raptors bid)

29

interlocutory injunction (or just injunction)

an order to refrain from doing something for a limited period of time (an order for someone to not do something) ; opposite of specific performance

30

unjust enrichment

occurs when on party has undeservedly or unjustly secured a beneft at the other party's expense