Vocabulary

Vocabulary:
1. Contracts – Legally binding agreements between two or more

parties.
2. Offeror – The person who makes an offer in a contract.
3. Offeree – The person to whom the offer is made.
4. Offer – A proposal made by one party to another intending to
create a legal obligation upon acceptance.
5. Revocation – The withdrawal of an offer by the offeror before
acceptance.
6. Counteroffer – A response to an offer in which the offeree alters
the terms, thereby rejecting the original offer.
7. Option – A contract in which the offeror is bound to keep the
offer open for a specific period in exchange for consideration.
8. Firm offer – An offer made by a merchant in writing, stating that
it will be kept open for a certain period of time.
9. Acceptance – An agreement to the terms of an offer.
10. Mirror image rule – Requires that the terms of the acceptance
exactly match those of the offer.
11. Bilateral contracts – Contracts in which both parties exchange
promises to perform.
12. Unilateral contracts – Contracts in which one party makes a
promise in exchange for the performance of an act by another party.
13. Genuine assent – True agreement between parties in a contract
without being clouded by fraud, duress, or mistakes.
14. Voidable – A contract that one or both parties may legally void.
15. Recission – The cancellation of a contract, returning the parties
to their original positions.
16. Ratification – The act of agreeing to be bound by the terms of a
contract made by another party.
17. Duress – Coercion that forces someone to enter into a contract
against their will.
18. Undue influence – Occurs when one party exerts unfair
influence over another, often in a fiduciary or trusting relationship.
19. Unilateral mistake – An error made by one party in a contract.
20. Mutual mistake – A misunderstanding shared by both parties
about a fundamental fact.
21. Material facts – Facts that are important to the subject matter of
the contract.
22. Void – A contract that is unenforceable and has no legal effect.
23. Innocent misrepresentation – A false statement made without
intent to deceive.
24. Fraudulent misrepresentation – A false statement made
knowingly with intent to deceive.
25. Fraud – Deliberate deception to secure unfair or unlawful gain
in a contract.
26. Consideration – Something of value exchanged between
parties in a contract.
27. Gift – The transfer of property without consideration or
compensation.
28. Donor – The person giving the gift.
29. Donee – The person receiving the gift.
30. Forbearance – Refraining from doing something one has a legal
right to do.
31. Promisor – The person making a promise.
32. Promisee – The person to whom the promise is made.
33. Legal value – The worth of an item or service in a contract that
constitutes consideration.
34. Nominal consideration – A token amount used in a contract to
satisfy the requirement of consideration.
35. Output contract – An agreement where a seller agrees to sell all
of its production to a buyer.
36. Requirements contract – An agreement where a buyer agrees
to purchase all of its needs from a seller.
37. Liquidated debt – A debt that has been determined or settled in
amount.
38. Accord and satisfaction – A legal way to settle a debt for less
than the amount owed by agreeing to a new settlement.
39. Release – A contract where one party forfeits the right to
pursue a legal claim against another.
40. Composition and creditors – An agreement between a debtor
and multiple creditors where the creditors agree to accept less than the full
amount owed.
41. Past consideration – Consideration given before a contract is
made and is not valid for a new contract.
42. Statute of limitations – The law that sets a time limit for filing a
lawsuit.
43. Promissory estoppel – A legal doctrine that allows a party to
enforce a promise made without a formal contract when they have relied on
that promise to their detriment.
Questions:
1. What are the elements required to form a contract?

• Offer, acceptance, consideration, mutual assent, and legality.
2. What are the requirements of an offer?
• It must be clear, definite, communicated to the offeree, and
express an intention to be bound.
3. What are ways to end offers?
• Revocation, rejection, counteroffer, expiration of time, and
death or insanity of the offeror.
4. How can an offeree ensure an offer will remain open?
• By creating an option contract, which requires consideration to
keep the offer open for a specified time.
5. What are the requirements of an effective acceptance?
• The acceptance must be unconditional, communicated to the
offeror, and comply with the terms of the offer (mirror image rule).
6. At what point is an acceptance effective?
• When it is communicated to the offeror, though acceptance via
mail is effective when sent, not received (mailbox rule).
7. When is a genuine assent not present?
• When there is fraud, duress, undue influence, or a mutual
mistake.
8. What are two key elements of undue influence?
• A relationship of trust or authority, and unfair persuasion by the
dominant party.
9. What are some of the mistakes that make a contract voidable or
void?
• Mutual mistakes of fact, unilateral mistakes in special
circumstances, and fraudulent misrepresentation.
10. How can a statement be treated as a misrepresentation?
• If it is a false statement of fact that induces another party to

enter into the contract.
11. What are some of the ways to remedy fraud?
• Recission, damages, or sometimes punitive damages.
12. What are the three requirements for consideration?
• There must be a bargain-for exchange, something of legal

value must be exchanged, and both parties must agree to the terms.
13. How adequate is consideration?
• Courts generally do not question the adequacy of consideration

as long as it has legal value.
14. What type of situation would a consideration be present under

limited circumstances?
• In nominal consideration or when a party’s promise is illusory.
15. What is a situation when a consideration is not needed?
• In cases of promissory estoppel, where reliance on a promise

substitutes for consideration.
16. When can the doctrine of promissory estoppel be applied?
• When one party reasonably relies on a promise, and it would be

unjust not to enforce the promise.

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Vocabulary:

1. Contracts – Legally binding agreements between two or more

1. What are the elements required to form a contract?

• If it is a false statement of fact that induces another party to

11. What are some of the ways to remedy fraud?

• Recission, damages, or sometimes punitive damages.

12. What are the three requirements for consideration?

• There must be a bargain-for exchange, something of legal

13. How adequate is consideration?

• Courts generally do not question the adequacy of consideration

14. What type of situation would a consideration be present under

• In nominal consideration or when a party’s promise is illusory.

15. What is a situation when a consideration is not needed?

• In cases of promissory estoppel, where reliance on a promise

• When one party reasonably relies on a promise, and it would be

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