Unit 5 - Contract Formation

Word

Definition

Example

enforceable

Capable of being legally enforced or upheld

The court confirmed that the settlement agreement was enforceable and legally binding

offer

A proposal or expression of willingness to enter into a contract

The company made a competitive offer to acquire the rival business

offeror

The party making an offer in a contract negotiation

The offeror is responsible for presenting the terms of the contract to the offeree

offeree

The party to whom an offer is made in a contract negotiation

The offeree accepted the offer and agreed to the terms outlined in the contract

counter offer

A response to an initial offer that includes changes or conditions

Instead of accepting the initial offer, the party submitted a counter offer with revised terms

rejection

The refusal or dismissal of an offer or proposal

The rejection of the proposal was disappointing, but negotiations continued

essential terms

The fundamental elements and details required for a valid contract

The contract's essential terms, including price and delivery dates, are clearly defined

subject matter

The specific item, service, or consideration at the core of a contract

The subject matter of the contract pertains to the sale of intellectual property rights

express contract

A contract in which the terms are explicitly stated and agreed upon by the parties

An express contract explicitly outlines the terms and obligations of the parties involved

implied contract

A contract formed by the conduct or actions of the parties involved

By accepting the goods, the buyer entered into an implied contract to pay the agreed-upon price

Statute of Frauds

A legal statute that requires certain contracts to be in writing to be enforceable

The Statute of Frauds requires certain contracts, like those involving real estate, to be in writing to be enforceable

real property

Land and any permanent structures or improvements on it

Real property includes land and any structures permanently affixed to it

formation of a contract

The process of creating a legally binding agreement between parties

The formation of a contract typically involves offer, acceptance, and consideration

Illegality of the subject matter

When the purpose or object of a contract violates the law

The contract was voided due to the illegality of the subject matter

fraud in the inducement

Deception or misrepresentation that leads someone to enter into a contract under false pretenses

Fraud in the inducement occurs when false statements are made to induce someone to enter into a contract

duress

Unlawful pressure or coercion used to force someone to enter into a contract against their will

The court found that the contract was signed under duress and therefore void

lack of legal capacity

When a party to a contract does not have the legal ability or competence to enter into it

Due to a lack of legal capacity, minors cannot enter into certain contracts

third-party beneficiary contracts

Contracts where a third party benefits from the agreement between the primary parties

Third-party beneficiary contracts grant rights to individuals who are not parties to the original contract

assignment of rights

The transfer of contract rights from one party to another

The assignment of rights allowed the creditor to transfer their claim to another party

delegation of duties

The transfer of contract duties or obligations from one party to another

The delegation of duties to a subcontractor helped expedite the project

assignee

The party receiving the assigned rights in a contract

The assignee of the contract is now responsible for fulfilling its terms

delegate

The party to whom contract duties are delegated

The manager decided to delegate the task to a team member with expertise in the area

Acceleration

A clause allowing a creditor to demand immediate payment in the event of default

The Acceleration clause allows the lender to demand immediate repayment of the loan under certain conditions

assignment

The transfer of contract rights to another party

The assignment of the lease transferred the tenant's obligations to a new party

confidentiality

The obligation to keep certain information private and not disclose it to others

The non-disclosure agreement ensures the confidentiality of sensitive business information

Consideration

Something of value exchanged between parties in a contract

Consideration, typically in the form of money or goods, is exchanged in a contract to make it legally binding

Force Majeure

Unforeseeable circumstances that may excuse contract performance

The force majeure clause provides protection in case unforeseen events prevent contract performance

liquidated damages

Pre-determined damages specified in a contract for a breach of its terms

The contract specified liquidated damages to compensate for any delays in completion

entire agreemen

A clause indicating that the written contract contains the complete agreement of the parties

The entire agreement between the parties is contained within this document

Severability

The principle that invalidation of one contract provision does not affect the rest of the contract

The Severability clause allows any invalid provisions in the contract to be removed without affecting the rest

termination

The act of ending or canceling a contract before its completion

The termination of the employment contract was due to repeated violations of company policies

payment of costs

The responsibility for covering expenses as outlined in the contract

The payment of costs associated with the legal dispute was agreed upon in the settlement

liability for damages

The obligation to compensate for losses resulting from a breach of contract

Liability for damages resulting from a breach of contract will be determined in court

within the sole judgment

At the discretion or judgment of one party

Within the sole judgment of the board, the decision was made to restructure the company

prior written consent

The requirement to obtain approval or consent before taking certain actions

Any changes to the contract require the prior written consent of both parties

abstain from taking action

To refrain from performing a specific action or behavior

The company decided to abstain from taking legal action in favor of a negotiated settlement

schedules and exhibits

Additional documents or attachments that are part of a contract and provide further details

The contract includes schedules and exhibits that provide additional details and specifications

in the event operator defaults in the performance

If the operator fails to meet its obligations

In the event the operator defaults in performance, penalties may apply as specified in the agreement

deemed

Considered or treated as

The signed contract was deemed legally binding upon acceptance by both parties

partIcularly

Specifically; in particular

The particularly sensitive nature of the information requires strict confidentiality measures

especially

Particularly; notably; with special emphasis

The especially challenging aspect of the case involved complex intellectual property rights

generally apply

Typically relevant or valid in most situations

The company's policies generally apply to all employees, regardless of their role

electronic contract

A contract formed electronically, often through digital means

An electronic contract signed with a secure digital signature is legally valid

electronic signature

A digital signature used to indicate agreement or consent in electronic contracts

The use of electronic signatures has streamlined contract signing processes

legally valid

Meeting the legal requirements to be enforceable as a contract

The contract is legally valid and can be enforced in court if necessary

revoke

To cancel, annul, or withdraw an offer or agreement

The party had the authority to revoke the contract if the other party failed to meet their obligations

prefer

To have a preference for one option over another

The client may prefer to resolve the dispute through arbitration rather than litigation

penalties

Punishments or fines imposed for non-compliance with a contract or law

Failure to meet project deadlines may result in penalties outlined in the contract

obtain

To acquire, secure, or gain possession of something

The attorney will seek to obtain a court order to enforce the judgment

notify

To inform or provide notice to someone about a particular matter

The tenant is required to notify the landlord of any necessary repairs promptly

breach

The violation or failure to fulfill the terms of a contract

The breach of the non-compete clause led to a legal dispute between the former employee and the company

enter into

To become a party to a contract or agreement

The parties are prepared to enter into negotiations to reach a mutually acceptable agreement

modify

To make changes or alterations to the terms of a contract

The contract allows either party to modify its terms with written consent from both parties

renew

To extend or continue the duration of a contract

The company decided to renew its lease agreement for an additional five years

terminate

To end or conclude a contract or agreement

The court ruled that the contract must be terminated

include

To contain or involve as a part of the contract

The contract should include clear and concise definitions of key terms

omit

To leave out or exclude from the contract or agreement

The attorney advised the client to omit unnecessary clauses to simplify the contract