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implied covenant
A promise the law requires in all contracts, regardless of whether the parties state it or not.
good faith
Without deception; honest.
contract
A legally enforceable promise.
damages
Compensable loss.
breach
The failure to perform duties and obligations required by contract.
private law
A legally binding agreement between consenting parties that does not apply to the public at large.
terms
Elements of contracts that specify important matters, such as quantity, price, and time for performance.
mutual assent
In common-law contracts, comprises offer and acceptance.
noncompete clause
A contract clause that restricts competition for a specified period of time, within a certain geographic region, and for specified activities.
formation
In common-law, this refers to offer, acceptance, and consideration.
Uniform Commercial Code (UCC)
A model statute that seeks to provide uniformity to contracts law among the different states. It is not a law until state legislatures adopt it as law.
void
Refers to a contract that is not valid on its face because it suffers from some fatal flaw.
voidable
Refers to the status of a contract that may be terminated due to some defect.
offer
In common law, it creates the power of acceptance in another party and includes the agreement’s essential elements, which must be definite and certain.
acceptance
In common law, it must be a mirror image of the offer.
consideration
A bargained-for exchange.
capacity
The legal ability to enter into a contract.
mirror image
The requirement for acceptance in common-law contracts; it means that the acceptance must be precisely the same as the offer.
counteroffer
A rejection of an offer. It is a new offer.
revocation
The retraction of an offer before it is accepted.
invitation to bargain
When a party invites others to make offers to buy; advertisements are a prevalent example.
bilateral contract
A contract in which both parties make a promise.
unilateral contract
A contract in which the accepting party may accept only through an action.
legal detriment
An obligation or a duty enforced by law.
illusory promise
A statement that looks like a promise but is actually only an illusion of a promise due to its conditional nature or its otherwise lack of a firm commitment.
infancy doctrine
A legal doctrine that allows minors to disaffirm contracts.
goods
As defined in §2-105 of the Uniform Commercial Code (UCC), things that are moveable, but not money or securities. It does not include land or houses.
boilerplate language
Standard legal language used in contracts or other legal documents.
battle of the forms
A term that describes inconsistent elements of an agreement between merchants.
Statute of Frauds
A statute that requires certain types of contracts to be in writing to be enforceable. Specifically, it requires contracts to be in writing for goods priced at five hundred dollars or more and signed by the defendant, for those contracts to be enforceable.
gap fillers
In contracts governed by the Uniform Commercial Code (UCC), terms that can be inserted into a contract when those terms are not definite and certain.
discharged
When parties to a contract have fulfilled their duties under the contract and they are released from further requirements to perform under the contract.
performance
Undertaking the legal duties imposed on us by the terms of the contract.
complete performance
Full and perfect performance of the promises, obligations, and duties contained in a contract.
breach
The failure to perform duties and obligations required by contract.
substantial performance
The standard for service contracts. It means that the performing party acted in good faith and conveyed enough benefit of the contract to the other party so that the other party can use it for its intended purpose and that the defects arising under the contract may be remedied by money damages.
strict performance
A standard of performance in a contract that requires perfect performance.
personal satisfaction
A standard of performance in a contract that means that the performance under the contract is scrutinized subjectively, either by a party to the contract or by a third-party beneficiary specified in the contract.
reasonable person standard
An objective standard based on reasonableness, against which actions are measured to determine sufficiency.
equitable remedy
A remedy imposed by the court to prevent injustice, which allows the court to enforce the terms of a “contract,” even though, technically speaking, there was no contract to begin with. An equitable remedy can substitute for lack of consideration.
quasi-contract
A type of equitable remedy that may be imposed on parties to avoid unjust enrichment to one party at the expense of the other.
promissory estoppel
A type of equitable remedy that may be imposed on parties to avoid injustice, when one party detrimentally relied on another party’s promise.
unjust enrichment
A benefit that is conferred or expected to be conferred unjustly.
quantum meruit
The name for damages awarded in quasi-contract cases, which means “as much as is deserved.”
disaffirmation
An option that may be exercised by a minor who is a party to a contract to render the contract void.
economic duress
A defense to contract that can be exercised when one party had no other reasonable alternative but to enter into a contract due to economic threat or pressure.
automatic stay
An order by the court to stop all collection activities of prepetition debts owed by a debtor in bankruptcy.
specific performance
A remedy that requires complete performance in a breach, rather than (or in addition to) monetary damages.
duty to mitigate
A duty placed on a party injured by breach, requiring that party to avoid damages by making reasonable efforts.
Lack of capacity
Defense for contracts due to minority legal status, temporary or permanent cognitive defects, impairment due to drugs, or lack of understanding of contract’s written language.
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