Key Terms
Agreement
A mutual understanding between two or more parties about rights and duties. Contract: a legally enforceable agreement be
Three elements ALL states agree on
1. Offer 2.
Offer
A conditional promise to do or refrain from doing something now or in the future. It is a willingness to enter into a co
Lapsed offer
An offer no longer valid because a reasonable time to accept has passed. An expired coupon is a classic example.
Acceptance
An implied or express act showing willingness to be bound by the terms of an offer. Both parties must understand and agr
Express acceptance
A party explicitly states they accept. Implied acceptance: inferred from conduct.
CRITICAL RULE
Transferring rights or duties does NOT release the original party from liability. If the new party fails to perform, the
Mutual assent
The parties' shared intention to enter a binding contract on agreed terms. If essential terms are not agreed upon, there
Consideration
The bargained-for exchange of something of value that shows the parties intend to be bound by the contract.
Two required elements
1. Something of value 2.
Legal detriment
Giving up a legal or property right.
Definition
The principle that a promise made WITHOUT consideration may still be enforced to prevent injustice if: 1. A definite pro
Bilateral contract
Both parties make a promise of performance. Also called mutual or reciprocal contracts.
Unilateral contract
One party makes a promise that the other accepts ONLY by performing. Not by promising — by doing.
Example
A supplier cancels a delivery order mid-project, forcing a contractor to breach his downstream contract and refund a cli