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A


ability to cure  A breaching party may be able to fix the defective performance.
abuse of process  Using the threat of resorting to the legal system to extract agreement to terms against the other party’s will.
acceptance of services or goods  Where an offeree has taken possession of the goods or received the benefit of the conferred services, he has been deemed to have accepted the offer.
accord and satisfaction  An agreement to accept the imperfectly proffered performance as a fulfillment of the contractual obligations.
actions inconsistent with rejection  A buyer must not do anything that is contrary to her previous refusal of the goods.
active concealment  Knowingly hiding a situation that another party has the right to know and, being hidden from them, assumes that it does not exist.
adequate assurances  Either party may request the other to provide further guarantees that performance will be forthcoming if the requesting party has reasonable suspicion that the other may default.
adequate assurances  Under the UCC, merchants may request of each other further promises that performance will be tendered.
adequate compensation  A party denied the benefit of his bargain may be paid or otherwise put in a position equivalent to where he would have been had performance been in compliance with the contractual terms.
adequate consideration  Exchanges that are fair and reasonable as a result of equal bargaining for things of relatively equal value.
affirmative acts  Knowing and conscious efforts by a party to the contract that are inconsistent with the terms of the agreement and that make contractual obligations impossible to perform.
affirmative defense  An “excuse” by the opposing party that does not just simply negate the allegation, but puts forth a legal reason to avoid enforcement.
affirmative duty  The law requires that certain parties positively act in a circumstance and not have to wait until they are asked to do that which they are required to do.
against the drafter  Imprecise terms and/or ambiguous wording is held against the party who wrote the document as he was the party most able to avoid the problem.
American rule of attorney fees and costs  Expenses incurred by the parties to maintain or defend an action for the breach of contract are generally not recoverable as damages.
anticipation  An expectation of things to come that has reasonable basis for the conclusion.
anticipatory repudiation  Words or acts from a party to the contract that clearly and unquestionably state the intent not to honor his contractual obligations before the time for performance has arrived.
assertion of defenses  Either the original parties or a third-party beneficiary has the right to claim any legal defenses or excuses that they may have as against each other. They are not extinguished by a third party.
assignee  The party to whom the right to receive contractual performance is transferred.
assignment  The transfer of the rights to receive the benefit of contractual performance under the contract.
assignor  The party who assigns his rights away and relinquishes his rights to collect the benefit of contractual performance.
   

 

B


battle of the forms  An evaluation of commercial writings whose terms conflict with each other in order to determine what terms actually control the performances due from the parties.
benefit conferred  The exchange that bestows value upon the other party to the contract.
bilateral contract  A contract in which the parties exchange a promise for a promise.
black letter law  The strict meaning of the law as it is written without concern or interpretation of the reasoning behind its creation.
blackmail  The extortion of payment based on a threat of exposing the victim’s secrets.
breach  A violation of an obligation under a contract for which a party may seek recourse to the court.
breach  A party’s performance that deviates from the required performance obligations under the contract.
bright line rules  A legal standard resolves issues in a simple, formulaic manner that is easy in application although it may not always be equitable.
   

 

C


cancel the contract  The aggrieved party has the right to terminate the contractual relationship with no repercussions.
certainty  The ability for a term to be determined and evaluated by a party outside of the contract.
certainty  The ability to rely on objective assurances to make a determination without doubt.
commercial unit  A batch of goods packaged or sold together in the normal course of the relevant industry.
compensatory damages  A payment to make up for a wrong committed and return the nonbreaching party to a position where the effect of the breach has been neutralized.
complete integration  A document that contains all the terms of the agreement and the parties have agreed that there are no other terms outside the contract.
concurrent condition  An event that happens at the same time as the parties’ performance obligations.
condition precedent  An event that happens beforehand and gives rise to the parties’ performance obligations. If the condition is not satisfied, the parties do not have a duty to perform.
condition subsequent  An event that, if it happens after the parties’ performance obligations, negates the duty to perform. If the condition is satisfied, the parties can “undo” their actions.
condition  An event that may or may not happen upon which the rest of the performance of the contract rests.
condition  An event that may or may not happen, but upon which the rest of the performance of the contract rests.
conditional acceptance  A refusal to accept the stated terms of an offer by adding restrictions or requirements to the terms of the offer by the offeree.
consent  All parties to a novation must knowingly assent to the substitution of either the obligations or parties to the agreement.
consequential damages  Damages resulting from the breach that are natural and foreseeable results of the breaching party’s actions.
consideration  The basis of the bargained for exchange between the parties to a contract that is of legal value.
consideration  Parol evidence is permitted to show that the subject matter of the contract as received was not as it was bargained for.
conspicuous limitation or exclusion of warranties  A seller may specifically deny any warranties as long as the limitation or exclusion of the warranties is set forth in language that is understandable and noticeable by the buyer.
contract of adhesion  An agreement wherein one party has total control over the bargaining process and therefore the other party has no power to negotiate and no choice but to enter into the contract.
contradictory  Evidence which is in conflict with the terms of the contract and inadmissible under the parol evidence rule.
counteroffer  A refusal to accept the stated terms of an offer by proposing alternate terms.
course of dealing  The parties’ actions taken in similar previous transactions.
course of performance  The parties’ actions taken in reliance on the particular transaction in question.
covenant  The promise upon which the contract rests.
covenant not to compete  An employment clause that prohibits an employee from leaving his job and going to work for a competitor for a specified period of time in a particular area.
covenant not to sue  An agreement by the parties to relinquish their right to commence a lawsuit based on the original and currently existing cause of action under the contract.
cover  The buyer can mitigate her losses from the seller’s breach by purchasing substitute goods on the open market.
cover  The nonbreaching party’s attempt to mitigate damages may require that he purchase alternate goods on the open market to replace those never delivered by the breaching party. The nonbreaching party can recover the difference in price between the market price and the contract price.
creditor  A party to whom a debt is owed.
cure  The seller is given a reasonable opportunity to fix the defects in the goods found by the buyer.
   

 

D


death or incapacity of a party  An excuse for performance on a contract due to the inability of the party to fulfill his obligation.
declaratory judgment  The court’s determination of the rights and responsibilities of a party with respect to the subject matter of the controversy.
defects in formation  Errors or omissions made during the negotiations that function as a bar to creating a valid contract.
delegant/delegator  The party who transfers his obligation to perform his contractual obligations.
delegate/delegatee  The party to whom the obligation to perform the contractual obligations is transferred.
delegation  The transfer of the duties/obligations to perform under the contract.
delivery  In commercial contracts, delivery may be accomplished by transferring actual possession of the goods, or putting the goods at the disposal of the buyer, or by a negotiable instrument giving the buyer the right to the goods.
deprived of expected benefit  A party can reasonably expect to receive that for which he bargained; if he does not receive it, the breach is considered material.
destruction of subject matter  Excuse of performance is based on the unforeseeable and unavoidable loss of the subject matter.
destruction or loss of subject matter  The nonexistence of the subject matter of the contract, which renders it legally valueless and unable to be exchanged according to the terms of the contract.
deterrent effect  The authority to assess excessive fines on a breaching party often can dissuade a party from committing an act that would subject him to these punitive damages.
detriment incurred  The exchange that burdens the party in giving the consideration to the other party to the contract.
detrimental effect  A party’s worsening of his position due to his dependence on the terms of the contract.
detrimental reliance  An offeree has depended upon the assertions of the offeror and made a change for the worse in his position depending on those assertions.
disavowal  A step taken by a formerly incapacitated person that denies and cancels the voidable contract and thereby makes it unenforceable.
divisibility/severability  A contract may be able to be compartmentalized into separate parts and seen as a series of independent transactions between the parties.
doctrine of unclean hands  A party seeking equitable remedies must have acted justly and in good faith in the transaction in question; otherwise, equitable remedies will not be available to a wrongdoer.
donee  A party to whom a gift is given.
duress  Unreasonable and unscrupulous manipulation of a person to force him to agree to terms of an agreement that he would otherwise not agree to.
duty  A legal obligation that is required to be performed.
duty to resell  The UCC requires commercial sellers to try to resell the goods that have not been accepted by the original buyer.
   

 

E


economic duress  The threat of harm to a party’s financial resources unless demands are met.
equitable remedies  Non-monetary remedies fashioned by the court using standards of fairness and justice.
equity  The doctrine of fairness and justice; the process of making things balance or be equal between parties.
excessive and unreasonable cost  A court will only consider excusing performance based on impracticality if the additional expense is extreme and disproportionate to the bargain.
excused from performance  The non-breaching party is released from her obligations to perform due to the other party’s breach.
executed  The parties’ performance obligations under the contract are complete.
executory  The parties’ performances under the contract have yet to occur.
existence of the subject matter  The goods to be transferred must exist at the time of the making of the contract.
expectation damages  A monetary amount that makes up for the losses incurred as a result of the breach that puts the nonbreaching party in as good a position as he would have been had the contract been fully performed.
explanatory  Oral testimony is permitted to clarify the terms of the contract.
express conditions  Requirements stated in words, either orally or written, in the contract.
express contract  An agreement whose terms have been communicated in words, either in writing or orally.
express warranty  A written representation by the seller as to the nature of the goods to be sold.
extinguishment of liability  Once a novation has occurred, the party exiting the agreement is no longer obligated under the contract.
   

 

F


fiduciary relationship  A relationship based on close personal trust that the other party is looking out for one’s best interests.
finish or scrap  The seller has the option to either finish producing the partially manufactured goods or stop production and scrap the materials for their recycled value.
firm offer  An option contract to keep the offer open between merchants that does not have to be supported by separate consideration in order to be valid.
firm offers  An agreement made by a merchant-offeror, and governed by the Uniform Commercial Code, that he will not revoke the offer for a certain time period. A firm offer is not supported by separate consideration.
forbearance of a legal right  Consideration that requires a party to refrain from doing something that he has the legal right to do.
force majeure  An event that is neither foreseeable nor preventable by either party that has a devastating effect on the performance obligations of the parties.
foreseeability  The capacity for a party to reasonably anticipate a future event.
forfeiture  A loss caused by a party’s inability to perform.
forfeiture  An unreasonable loss.
forgoing a legal right to sue  Valid consideration as it has recognized legal value to support a contractual obligation.
formal contract  An agreement made that follows a certain prescribed form like negotiable instruments.
four corners doctrine  A principle of contract law that directs the court to interpret a contract by the terms contained within the pages of the document.
fraud  A knowing and intentional misstatement of the truth in order to induce a desired action from another person.
freedom of contract  The doctrine that permits parties to make agreements on whatever terms they wish with few exceptions.
frustration of purpose  Changes in the circumstances surrounding the contract may render the performance of the terms useless in relation to the reasons for entering into the contract.
   

 

G


gift  Bestowing a benefit without any expectation on the part of the giver to receive something in return and the absence of any obligation on the part of the receiver to do anything in return.
good consideration  An exchange made based on love and affection, which have no legal value.
good faith obligation  Both buyers and sellers must deal with each other in a reasonable and fair manner without trying to avoid legitimate performance obligations.
guarantee  An agreement in which a third party assures the repayment of a debt owed by another party.
guarantor  A party who assumes secondary liability for the payment of another’s debt. The guarantor is liable to the creditor only if the original debtor does not make payment.
   

 

I


identification of the goods to the contract  Once a seller has designated specific goods as the ones that will be delivered to the buyer, the buyer has a protectable interest in them.
identity or quality of the subject matter  The goods to be transferred must be described with sufficient clarity to allow an outside third party to recognize them.
ignore the repudiation  If the repudiating party has not permanently made his performance impossible, the aggrieved party can wait to see if the repudiator changes his mind and does perform.
illegal scheme  A plan that uses legal steps to achieve an illegal result.
illusory promise  A statement that appears to be a promise but actually enforces no obligation upon the promisor because he retains the subjective option whether or not to perform on it.
immediate right to commence a lawsuit  The aggrieved party does not have to wait until the time when performance would be due under the contract term where there has been an anticipatory repudiation.
implied contract  An agreement whose terms have not been communicated in words, but rather by conduct or actions of the parties.
implied in fact  Conditions that are not expressed in words but that must exist in order for the terms of the contract to make sense and are assumed by the parties to the contract.
implied in law  Conditions that are not expressed in words but are imposed by the court to ensure fairness and justice as a result of its determination.
implied warranty  An unwritten representation that is normally and naturally included by operation of law that applies to the goods to be sold.
implied warranty for a particular purpose  If a seller has reason to know of the needs of the buyer in relation to the goods to be sold, the seller impliedly warrants the goods to that higher standard.
impossibility  An excuse for performance based upon an absolute inability to perform the act required under the contract.
impracticality  An excuse for performance based upon uselessness or excessive cost of the act required under the contract.
incapacity  The inability to act or understand the actions that would create a binding legal agreement.
incidental beneficiaries  Persons who may derive some benefit from the performance of a contract but who were not intended to directly benefit from the performance.
incidental damages  Damages resulting from the breach that are related to the breach but not necessarily directly foreseeable by the breaching party.
injunction  A court order that requires a party to refrain from acting in a certain way to prevent harm to the requesting party.
insolvency  A party’s inability to pay his debts, which may result in a declaration of bankruptcy and put all contractual obligations on hold or terminate them.
inspect  The buyer must take steps to examine the goods to ensure they are of the type indicated in the contract. The seller must make the goods available for this purpose.
intent of the parties  Almost always the controlling factor in determining the terms and performance of an agreement.
intent  Having the knowledge and desire that a specific consequence will result from an action.
intent to deceive  The party making the questionable statement must plan on the innocent party’s reliance on the first party’s untruthfulness.
intoxication  Under the influence of alcohol or drugs which may, depending on the degree of inebriation, render a party incapable of entering into a contractual relationship.
irreparable harm  The requesting party must show that the actions of the defendant will cause a type of damage that cannot be remedied by any later award of the court.
irrevocable offers  Those offers that cannot be terminated by the offeror during a certain time period.
   

 

K


knowing and intentional  A party must be aware of and plan on the outcome of his words or actions in order to be held accountable for the result.
knowledge of the offer  An offeree must be aware of the terms of the offer in order to accept it.
   

 

L


lapse of time  An interval of time that has been long enough to affect a termination of the offer.
“last in time = first in right”  A principle in law that favors the most current activity or change with respect to the transaction as it is most likely the most reflective of the intent of the parties.
legal remedy  Relief provided by the court to a party to redress a wrong perpetrated by another party.
legal value  Having an objectively determinable benefit that is recognized by the court.
legislation  Regulations codified into laws by Congress.
letter of intent/nonbinding offer  A statement that details the preliminary negotiations and understanding of the terms of the agreement but does not create a binding obligation between parties.
limitation of acceptance  A commercial offeror may specifically state that the offeree must accept all terms as set forth in the offer with no deviations.
limitation of damages  An amount of money agreed upon in the original contract as the maximum recovery the nonbreaching party will be entitled to in the event of a breach.
liquidated damages  An amount of money agreed upon in the original contract as a reasonable estimation of the damages to be recovered by the nonbreaching party.
lost profits  A calculable amount of money that the nonbreaching party would have made after the execution of performance under the agreement but that has not been realized due to the breach.
   

 

M


mailbox rule  A principle of contract law that sets the time of acceptance of an offer at the time it is posted and the time of rejection of an offer at the time it is received.
malum in se  An act that is prohibited because it is “evil in itself.”
malum prohibitum  An act that is “prohibited” by a rule of law.
market price  The amount of money that another neutral party would pay for the goods on the open market.
market price  The objective worth placed on the subject matter in the open marketplace for similar products.
material  A term is material if it is important to a party’s decision whether or not to enter into the contact.
material  An element or term that is significant or important and relates to the basis for the agreement.
material alteration  A change in the terms that would surprise or impose hardship on the other party if allowed to become a part of the agreement.
medicinal side effects  Under the influence of over-the-counter or prescription drugs having an impact on a person’s mental capacity which may render a party incapable of entering into a contractual relationship.
meeting of the minds  A legal concept requiring that both parties understand and ascribe the same meaning to the terms of the contract.
meeting of the minds  A theory holding that both parties must both objectively and subjectively intend to enter into the agreement on the same terms.
mental duress  The threat of harm to a party’s overall well­being or a threat of harm to loved ones that induces stress and action on the party of the threatened party.
mentally infirm  Persons not having the capacity to understand a transaction due to a defect in their ability to reason and, therefore, who do not have the requisite mental intent to enter into a contract.
merchantable  Goods must meet certain standards that are required in the relevant industry.
merchants  Businesspersons who have a certain level of expertise dealing in commercial transactions regarding the goods they sell.
merchants  Persons who regularly deal in goods of the kind specified in the agreement. They hold themselves out as having special knowledge in their area.
mere request for a change  A party’s interest in renegotiating the terms of the contract does not amount to anticipatory repudiation.
merger  Combining previous obligations into a new agreement.
merger clause  Language of a contract that indicates that the parties intend to exclude all outside evidence relating to the terms of the contract because it has been agreed that all relevant terms have been incorporated in the document.
minors  Persons under the age of 18; once a person has reached 18, she has reached the age of majority.
mirror image rule  A requirement that the acceptance of an offer must exactly match the terms of the original offer.
misrepresentation  A reckless disregard for the truth in making a statement to another in order to induce a desired action.
mitigate  To lessen in intensity or amount.
modification  A change or addition in contractual terms that does not extinguish the underlying agreement.
moral obligation  A social goal or personal aspiration that induces a party to act without any expectation of a return performance from the recipient.
mutual mistake  An error made by both parties to the transaction; therefore, neither party had the same idea of the terms of the agreement. The contract is avoidable by either party.
mutual rescission  An agreement by mutual assent of both parties to terminate the contractual relationship and return to the pre-contract status quo.
mutuality of assent  Both parties must objectively manifest their intention to enter into a binding contract by accepting all of the terms.
mutuality of contract  Also known as “mutuality of obligation”—is a doctrine that requires both parties to be bound to the terms of the agreement.
mutuality of obligation  Also known as “mutuality of contract”; it is a doctrine that requires both parties to be bound to performance obligations under the agreement.
   

 

N


necessities  Goods and services that are required; basic elements of living and employment.
nominal consideration  The value of the things exchanged are grossly disproportionate to each other so that very little is given in exchange for something of great value.
nominal damages  A small amount of money given to the nonbreaching party as a token award to acknowledge the fact of the breach.
nonconforming  Goods that are not in reasonable compliance with the specifications in the contract.
nondisclosure  The intentional omission of the truth.
novation  An agreement that replaces previous contractual obligations with new obligations and/or different parties.
   

 

O


objection to terms  A merchant must state her disapproval of the offeree’s new or different terms within a reasonable time, or else they are considered accepted by her.
objective  Impartial and disinterested in the outcome of the dispute.
objective impracticality  A party’s performance is excused only when the circumstances surrounding the contract become so burdensome that any reasonable person in the same situation would excuse performance.
objectively determinable  The ability of the price to be ascertained by a party outside of the contract.
objectively reasonable  A standard of behavior that the majority of persons would agree with or how most persons in a community generally act.
obligor  The original party to the contract who remains obligated to perform under the contract.
offer  A promise made by the offeror to do (or not to do) something provided that the offeree, by accepting, promises or does something in exchange.
offeree  The person to whom an offer is made.
offeror  The person making the offer to another party.
option contract  A separate and legally enforceable agreement included in the contract stating that the offer cannot be revoked for a certain time period.
option contracts  A separate and legally enforceable agreement included in the contract stating that the offer cannot be revoked for a certain time period. An option contract is supported by separate consideration.
output contract  An agreement wherein the quantity that the offeror desires to purchase is all that the offeree can produce.
   

 

P


parol evidence  Oral testimony offered as proof regarding the terms of a written contract.
parol evidence rule  A court evidentiary doctrine that excludes certain types of outside oral testimony offered as proof of the terms of the contract.
partial breach  A failure of performance that has little, if any, effect on the expectations of the parties.
partial integration  A document that contains the essential terms of the contract but not all the terms that the parties may have or need to agree upon.
partial performance doctrine  The court’s determination that a party’s actions taken in reliance on the oral agreement “substitutes” for the writing and takes the transaction out of the scope of the Statute of Frauds and, thus, can be enforced.
partial performance/substantial beginning  An offeree has made conscientious efforts to start performing according to the terms of the contract. The performance need not be complete nor exactly as specified, but only an attempt at significant compliance.
parties  The persons involved in the making of the contract.
past consideration  A benefit conferred in a previous transaction between the parties before the present promise was made.
performance prevented  If a party takes steps to preclude the other party’s performance, then the performance is excused due to that interference.
permanent injunction  A court order that prohibits a party from acting in a certain way for an indefinite and perpetual period of time.
physical duress  The threat of bodily harm unless the aggressor’s demands are met.
plain meaning rule  Courts will use the traditional definition of terms used in a contract if those terms are not otherwise defined in the agreement.
pledge to charity  A legally enforceable gift to a qualifying institution.
poor judgment  Contract law does not allow avoidance of performance obligations due to a mistake that was simply a bad decision on the part of one party.
positively and unequivocally  In order to treat a party’s statement as an anticipatory repudiation, the statements or actions from the potential repudiator must clearly and unquestionably communicate that intent not to perform.
predominant factor test  An examination of a transaction to determine whether the primary purpose of the contract is the procurement of goods or services.
preexisting duty  An obligation to perform an act that existed before the current promise was made that requires the same performance presently sought.
preliminary hearing  An appearance by both parties before the court to assess the circumstances and validity of the restraining application.
present obligation  The performances under the contract must not have been carried out but must still be executory in order to be available for a novation.
price under the contract  The seller has the right to collect the agreed-upon price for the goods where the buyer has possession, despite the market conditions at the time.
price  The monetary cost assigned to a transaction by the parties.
price  The monetary value ascribed by the parties to the exchange involved in the contract.
prior or contemporaneous agreements  These negotiations and resulting potential terms are governed by the principles of the parol evidence rule.
privity  A relationship between the parties to the contract who have rights and obligations to each other through the terms of the agreement.
promisee  The party to whom the promise of performance is made.
promisor  The party who makes a promise to perform under the contract.
promissory estoppel  A legal doctrine that makes some promises enforceable even though they are not compliant with the technical requirements of a contract.
promissory reliance  A party’s dependence and actions taken upon another’s representations that he will carry out his promise.
proper dispatch  An approved method of transmitting the acceptance to the offeror.
punitive damages  An amount of money awarded to a nonbreaching party that is not based on the actual losses incurred by that party, but as a punishment to the breaching party for the commission of an intentional wrong.
   

 

Q


quantum meruit  A Latin term referring to the determination of the earned value of services provided by a party.
quantum valebant  A Latin term referring to the determination of the market worth assignable to the benefit conferred.
quasi-contract/pseudo-contract/implied-in-law contract  Where no technical contract exists, the court can create an obligation in the name of justice to promote fairness and afford a remedy to an innocent party and prevent unearned benefits to be conferred on the other party.
   

 

R


ratification  A step taken by a formerly incapacitated person that confirms and endorses the voidable contract and thereby makes it enforceable.
reasonable  Comporting with normally accepted modes of behavior in a particular instance.
reasonable assignment  A transfer of performance obligations may only be made where an objective third party would find that the transfer was acceptable under normal circumstances and did not alter the rights and obligations of the original parties.
reformation  An order of the court that “rewrites” the agreement to reflect the actual performances of the parties where there has been some deviation from the contractual obligations.
rejection  A refusal to accept the terms of an offer.
release  A discharge from the parties’ performance obligations that acknowledges the dispute but forgoes contractual remedies.
reliance  A party’s dependence and actions based on the assertions of another party.
reliance damages  A monetary amount that “reimburses” the nonbreaching party for expenses incurred while preparing to perform her obligations under the agreement but lost due to the breach.
requirements contract  An agreement wherein the quantity that the offeror desires to purchase is all that the offeror needs.
resale value  The nonbreaching party’s attempt to mitigate damages may require that he sell the unaccepted goods on the open market. The nonbreaching party can recover the difference in price between the market price and the contract price
rescission and restitution  A decision by the court that renders the contract null and void and requires the parties to return to the wronged party any benefits received under the agreement.
restitution damages  A monetary amount that requires the breaching party to return any benefits received under the contract to the nonbreaching party to ensure that the breaching party does not profit from the breach.
retract the repudiation  Until the aggrieved party notifies the repudiator or takes some action in reliance on the repudiation, the repudiator has the right to “take it back” and perform on the contract.
revocation  The offeror’s cancellation of the right of the offeree to accept an offer.
revocation of a previous acceptance  A buyer has the right to refuse to accept the seller’s attempts at a cure if those attempts are still not in conformance with the contract requirements.
right to transfer  The party supplying the goods must have the legal title (ownership) or legal ability to give it to the receiving party.
   

 

S


sale on approval  The agreement may provide that the contract for sale is not consummated until the buyer receives and approves of the goods.
sale or return  The agreement provides that if the buyer is unable to resell the goods, she is permitted to return the unsold goods to the original seller.
severability of contract  The ability of a court to choose to separate and discard those clauses in a contract that are unenforceable and retain those that are.
sham consideration  An unspecified and indeterminable recitation of consideration that cannot support an exchange.
signed by the party to be charged  The writing that purports to satisfy the Statute of Frauds must be signed by the party against whom enforcement is sought.
silence  In certain circumstances, no response may be necessary to properly accept an offer.
solicited offer  An invitation for members of a group to whom it is sent (potential offerors) to make an offer to the party sending the information (the potential offeree).
specialized goods  A product made for a particular buyer with specifications unique to that buyer so that it could not be sold on the general market.
specific performance  A court order that requires a party to perform a certain act in order to prevent harm to the requesting party.
specific reasons for rejection  The buyer is under an obligation to notify the seller within a reasonable time not only that the goods have been rejected but also the reasons for the refusal to accept the goods.
speculative damages  Harm incurred by the nonbreaching party that is not susceptible to valuation or determination with any reasonable certainty.
spot sale  A purchase on the open market in that particular place at that particular time.
standards of good faith and fair dealing  A party’s performance will be judged in light of the normal or acceptable behavior displayed generally by others in a similar position.
statutory authority  The legislature of a jurisdiction may codify certain actions as subject to punitive damages if they occur in conjunction with a contractual breach.
subject matter  The bargained-for exchange that forms the basis for the contract.
subsequent agreements  Negotiations and potential terms that are discussed after the agreement has been memorialized are not covered by the parol evidence rule.
substantial beginning  An offeree has made conscientious efforts to start performing according to the terms of the contract. The performance need not be complete nor exactly as specified, but only an attempt at significant compliance.
substantial compliance  A legal doctrine that permits close approximations of perfect performance to satisfy the contractual terms.
substantial detriment  The change in a party’s position in reliance upon another’s representations that, if unanswered, will work a hardship on that party.
substituted agreement  A replacement of a previous agreement with a new contract with additional but not inconsistent obligations.
substituted goods  The products purchased on the open market that replace those not delivered by the breaching party.
sufficient consideration  The exchanges have recognizable legal value and are capable of supporting an enforceable contract. The actual values are irrelevant.
supervening illegality  An agreement whose terms at the time it was made were legal but, due to a change in the law during the time in which the contract was executory, that has since become illegal.
supervening illegality  A change in the law governing the subject matter of the contract that renders a previously legal and enforceable contract void and therefore excusable.
supplemental evidence which adds to, but does not contradict, the original agreement is admissible under the parol evidence rule.  Agreements of the parties that naturally add to, but do not conflict with, the original terms of the partially integrated contract.
surety  A party who assumes primary liability for the payment of another’s debt.
   

 

T


technical terms, specifications, or trade/business custom  Parol evidence is permitted to explain the meaning of special language in the contract as the parties understood it if the plain ordinary meaning of the language was not intended or was ambiguous.
temporary injunction  A court order that prohibits a party from acting in a certain way for a limited period of time.
tender of delivery  The seller is ready to transfer the goods to the buyer and the goods are at the disposal of the buyer.
tender of performance  The offeree’s act of proffering the start of his contractual obligations. The offeree stands ready, willing, and able to perform.
third-party beneficiary  A person, not a party to the contract, who stands to receive the benefit of performance of the contract.
time for performance  A condition that requires each party be given a reasonable time to complete performance.
time of the essence  A term in a contract that indicates that no extensions for the required performance will be permitted. The performance must occur on or before the specified date.
tortious  A private civil wrong committed by one person as against another that the law considers to be punishable.
total breach  A failure of performance that has a substantial effect on the expectations of the parties.
transactions in goods  A sale or other transfer of title to identifiable, tangible, movable things from a merchant to a buyer.
transfer of interest  In a purchase agreement, a preliminary requirement is that the seller has legal title to the subject matter and authority to transfer it to the seller. If the seller transfers his interest to a third party, this preliminary requirement can no longer be met.
TRO  A temporary restraining order that is issued prior to any hearing in the court.
   

 

U


unconscionable  So completely unreasonable and irrational that it shocks the conscience.
under the influence  Persons who do not have the capacity to understand a transaction due to overconsumption of alcohol or the use of drugs, either legal or illegal, and, therefore, who do not have the requisite mental intent to enter into a contract.
undue influence  Using a close personal or fiduciary relationship to one’s advantage to gain assent to terms that the party otherwise would not have agreed to.
unforeseen circumstances  Occurrences that could not be reasonably forecast to happen.
unilateral contract  A contract in which the parties exchange a promise for an act.
unilateral mistake  An error made by only one party to the transaction. The contract may be avoided only if the error is detectable or obvious to the other party.
unjust enrichment  The retention by a party of unearned and undeserved benefits derived from his own wrongful actions regarding an agreement.
usage of the trade  Actions generally taken by similarly situated parties in similar transactions in the same business field.
   

 

V


V + E + L - M - R = D  Value + Expenses + Losses - Mitigation - Received value = Damages
value  The objective worth placed on the subject matter.
value  The worth of the goods or services in the transaction as determined by an objective outside standard.
value of the goods as accepted  The buyer is entitled to a “set-off ” for the difference between the price of the goods as specified in the contract and the actual price those goods would garner on the open market.
vested  Having a present right to receive the benefit of the performance when it becomes due.
void  A transaction that is impossible to be enforced because it is invalid.
voidable  Having the possibility of avoidance of performance at the option of the incapacitated party.
voidable obligation  A duty imposed under a contract that may be either ratified (approved) or avoided (rejected) at the option of one or both of the parties.
voluntary destruction  If a party destroys the subject matter of the contract, thereby rendering performance impossible, the other party is excused from his performance obligations due to that termination.
voluntary disablement  If a party takes steps to preclude his own performance, then the performance due from the other party is excused due to that refusal/inability to perform.
voluntary repayment of debt  An agreement to pay back a debt that cannot be collected upon using legal means because the obligation to make payments has been discharged.
   

 

W


waiver  A party may knowingly and intentionally forgive the other party’s breach and continue her performance obligations under the contract.
warranty  A promise or representation by the seller that the goods in question meet certain standards.
warranty of title  The seller promises the buyer that the seller has the right to transfer the title free and clear of encumbrances to the buyer.
writing to satisfy the Statute of Frauds  A document or compilation of documents containing the essential terms of the agreement.







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