FE-1 Law of Contract key terms

A clear statement of terms on which a person is willing to be bound, communicated to another, that becomes a contract once accepted.

Unqualified agreement to every term of an offer, communicated to the offeror, that turns the offer into a binding contract.

A preliminary communication inviting others to make offers, such as a shop display or advertisement, which cannot itself be accepted to form a contract.

A reply that changes or adds terms to an offer, which rejects the original offer and creates a new offer open to acceptance.

A dispute where each party claims its own standard terms govern, usually resolved by finding the last set of terms sent before performance without objection.

Something of value given by each party in exchange for the other's promise, such as money, goods, services, or a promise to do or refrain from doing something.

An act or promise already completed before the other party's promise was made, which generally cannot support a binding contract.

The requirement that parties mean their agreement to have legal consequences; presumed in commercial dealings but not in domestic or social arrangements.

The legal ability of a person to enter a binding contract, which may be limited by age, mental disorder, intoxication, or corporate status.

A person below the legal age of majority, whose contracts are generally voidable or binding only for necessities and beneficial contracts of service.

A false statement of fact made by one party that induces the other to enter the contract, giving possible rights to damages or rescission.

A false statement made knowingly, without belief in its truth, or recklessly as to its truth, entitling the deceived party to damages in tort and rescission.

A false statement of fact made with reasonable belief in its truth, generally allowing rescission but not damages at common law.

Pressure such as threats of violence, unlawful restraint, or economic coercion that removes a party's free consent, making the contract voidable.

Abuse of a relationship of trust and confidence so that one party's will is overcome, rendering the resulting contract voidable at that party's option.

The presence of an unlawful purpose or statutory prohibition in a contract, which may make it unenforceable or void depending on the rule infringed.

An agreement that never has legal effect because an essential element is missing, such as agreement, certainty, or legality of object.

A valid contract that one party may elect to rescind because of a defect such as misrepresentation, duress, or undue influence.

The setting aside of a voidable contract, restoring the parties as far as possible to their pre-contract positions, subject to bars such as lapse of time.

The requirement that an agreement's essential terms be sufficiently clear and complete to be enforced, since vague or incomplete terms may make it void.

A provision that parties will settle terms in future, generally unenforceable for uncertainty unless it supplies a workable objective mechanism.

The rule that only the parties to a contract may enforce it or be bound by it, subject to statutory and common law exceptions.

The ability of a person who is not a party to a contract to enforce a term of it, typically where statute or a trust or agency arrangement allows.

The transfer by one party of its rights under a contract to another person, usually requiring notice to the other contracting party.

Replacing one contract with a new one, often substituting a new party for an existing party, with the consent of all involved.

A term so important that its breach entitles the innocent party to terminate performance and claim damages.

A less important contractual term whose breach gives a right to damages only, not to terminate the contract.

A term whose importance is not fixed in advance, so the remedy for breach depends on how serious the consequences are.

A term not expressly written but read into the contract by statute, custom, or to give effect to the parties' presumed intention.

A term actually stated by the parties, whether orally, in writing, or partly both, forming part of the agreement.

The process by which standard terms become part of a contract because reasonable notice of them was given before or at the time of contracting.

A term that seeks to exclude or restrict liability, which is enforceable only if properly incorporated and not barred by statute.

Statutory rules, such as the Unfair Contract Terms Act 1977 and Consumer Rights Act 2015, that control exemption clauses and unfair terms in standard and consumer contracts.

The statutory standard asking whether a term was a fair and reasonable one to include, considering the parties' bargaining positions and circumstances known to them.

Failure to perform a contractual obligation, whether by non-performance, defective performance, or preventing the other party from performing.

A breach serious enough to entitle the innocent party to treat the contract as at an end and claim damages.

A clear indication before performance is due that a party will not perform, allowing the innocent party to sue immediately or await performance.

Discharge of a contract by an unforeseen event beyond either party's control that makes performance impossible or radically different from what was agreed.

A contractual provision allocating risk for specified events beyond the parties' control, often excusing or suspending performance.

A money award compensating the innocent party for loss caused by breach, aiming to put that party in the position performance would have produced.

The test limiting recoverable loss to damage arising naturally from the breach or within the parties' reasonable contemplation when contracting.

The duty of a claimant to take reasonable steps to reduce loss flowing from a breach, failing which damages may be reduced.

A sum agreed in advance as compensation for breach, enforceable if it is a genuine estimate and not a penalty.

A provision imposing a disproportionately large sum to deter breach rather than compensate loss, which is unenforceable.

An equitable order compelling a party to perform its contractual obligation, granted only where damages are inadequate and the contract is not one for personal services.

An equitable order restraining a party from doing something, often used to enforce a negative promise, such as a restrictive covenant.

A clause restricting a person's freedom to trade or work, enforceable only if reasonable and protecting a legitimate interest.

An equitable principle preventing a party from going back on a clear promise or representation relied upon, even without consideration, where it would be inequitable.

The voluntary giving up of a contractual right, which may be temporary or permanent depending on the circumstances.

The rule that acceptance by post takes effect when the letter is properly posted, not when it arrives, unless the offer requires otherwise.

Withdrawal of an offer before acceptance, effective only when communicated to the offeree, though postal or other rules may vary this.

A separate agreement supported by consideration that keeps an offer open for a stated period and cannot be revoked during it.

A formal written instrument signed, witnessed, and delivered, which can be enforceable without consideration.

Pre-written contractual terms used in many similar transactions, which bind the other party only if properly incorporated before contracting.

The principle that a written contract is generally taken to contain the whole agreement, limiting reliance on earlier oral statements, subject to exceptions.

A term stating that the written document contains the whole agreement, intended to prevent reliance on pre-contractual statements.

An event or state of affairs that must occur before a contractual obligation arises or becomes enforceable.

An event that, if it occurs, brings an existing contractual obligation to an end.