Key Terms
Agreement
A mutual understanding between two or more parties about their rights and duties toward each other.
Contract
A legally enforceable agreement between two or more parties.
EXCEPTION
Contracts that are illegal or against public policy are not enforceable.
Lapsed offer
No longer valid because a reasonable time to accept has passed. An expired coupon is a lapsed offer.
Acceptance
An implied or express act showing willingness to be bound by the terms of an offer.
Express acceptance
Stated directly. Implied acceptance: shown through conduct.
Counter-offer
If acceptance changes, adds, or modifies terms, it is a counter-offer — not acceptance — and no contract is formed. The
Mutual assent (meeting of the minds)
The parties' shared intention to enter a binding contract on agreed terms. If essential terms aren't agreed upon, there
Consideration
The bargained-for exchange of something of value that shows the parties intend to be bound.
Promissory estoppel
A promise made without consideration may still be enforced to prevent injustice when the promisor should have expected r
Bilateral contract
Both parties make a promise of performance. Also called mutual or reciprocal.
Unilateral contract
One party makes a promise the other can only accept by performing. Example: a reward for information.
Express contract
Terms are spelled out directly, in words — oral or written. Both parties clearly intend a legally enforceable agreement.
Example
An electrician's supplier backs out; the electrician can't find another in time, breaches the warehouse contract, and ha
Implied contract
Inferred from the parties' conduct. No explicit discussion of terms — but agreement is clear from behavior.