AIC 301 Terminology Questions and Correct
Answers
Contract
A legally enforceable agreement between two or more parties.
Promisor
The party to a contract making a promise.
Promisee
The party to a contract to whom a promise is made.
Privity of contract
The relationship that exists between the parties to a contract.
Third-party beneficiary
A person who is not a party to a contract but who benefits from it and has a legal right to
enforce the contract if it is breached by either of the contracting parties.
Breach of contract
The failure, without legal excuse, to fulfill a contractual promise.
Offeror
The party to a contract who promises to give something in return for a promise or an act by
another party.
Offeree
The party to a contract who makes a promise or acts in return for something offered by
another party.
,Uniform Commercial Code
A code of laws that govern commercial transactions in the United States.
Bilateral contract
A contract in which each party promises a performance.
Unilateral contract
A contract in which only one party makes a promise or undertakes the requested
performance.
Executed contract
A contract that has been completely performed by both parties.
Executory contract
A contract that has not been completely performed by one or both of the parties.
Express contract
A contract whose terms and intentions are explicitly stated.
Implied contract
A contract whose terms and intentions are indicated by the actions of the parties to the
contract and the surrounding circumstances.
Implied-in-fact contract
A contract that is not express but that the parties presumably intended, either by tacit
understanding or by the assumption that it existed.
Implied-in-law contract
,An obligation that is not an actual contract but that is imposed by law because of the parties'
conduct or some special relationship between them or because one of them would otherwise
be unjustly enriched.
Voidable contract
A contract that one of the parties can reject (avoid) based on some circumstance surrounding
its execution.
Void contract
An agreement that, despite the parties' intentions, never reaches contract status and is
therefore not legally enforceable or binding.
Mutual assent
The act of two or more parties coming together to agree to the terms of a contract.
Fraud
An intentional misrepresentation resulting in harm to a person or an organization.
Representation
A statement of alleged fact.
Material fact
A fact that is significant to a decision or matter at hand.
Rescission
A legal act of canceling something (like a contract) and making it void.
Unilateral mistake
A perception by one party to a contract that does not agree with the facts.
, Bilateral mistake
A perception by both parties to a contract that does not agree with the facts.
All rights reserved.
A perception by both parties to a contract that does not agree with the facts.
Duress
The use of restraint, violence, threats of violence, or wrongful pressure to compel a party to
act contrary to his or her wishes or interests.
Undue influence
The improper use of power or trust to deprive a person of free will and substitute another's
objective, resulting in lack of genuine assent to a contract.
Uniform Commercial Code (UCC)
A model code that has been adopted in whole or in part by each state and whose purpose is to
provide a consistent legal basis for business transactions throughout the United States and its
territories.
Parol evidence rule
A provision that prevents the terms of a contract from being modified by evidence of oral or
other agreements after the contract has been written.
Statute of frauds
A law to prevent fraud and perjury by requiring that certain contracts be in writing and
contain the signature of the party responsible for performing that contract.
Real property (realty)
Answers
Contract
A legally enforceable agreement between two or more parties.
Promisor
The party to a contract making a promise.
Promisee
The party to a contract to whom a promise is made.
Privity of contract
The relationship that exists between the parties to a contract.
Third-party beneficiary
A person who is not a party to a contract but who benefits from it and has a legal right to
enforce the contract if it is breached by either of the contracting parties.
Breach of contract
The failure, without legal excuse, to fulfill a contractual promise.
Offeror
The party to a contract who promises to give something in return for a promise or an act by
another party.
Offeree
The party to a contract who makes a promise or acts in return for something offered by
another party.
,Uniform Commercial Code
A code of laws that govern commercial transactions in the United States.
Bilateral contract
A contract in which each party promises a performance.
Unilateral contract
A contract in which only one party makes a promise or undertakes the requested
performance.
Executed contract
A contract that has been completely performed by both parties.
Executory contract
A contract that has not been completely performed by one or both of the parties.
Express contract
A contract whose terms and intentions are explicitly stated.
Implied contract
A contract whose terms and intentions are indicated by the actions of the parties to the
contract and the surrounding circumstances.
Implied-in-fact contract
A contract that is not express but that the parties presumably intended, either by tacit
understanding or by the assumption that it existed.
Implied-in-law contract
,An obligation that is not an actual contract but that is imposed by law because of the parties'
conduct or some special relationship between them or because one of them would otherwise
be unjustly enriched.
Voidable contract
A contract that one of the parties can reject (avoid) based on some circumstance surrounding
its execution.
Void contract
An agreement that, despite the parties' intentions, never reaches contract status and is
therefore not legally enforceable or binding.
Mutual assent
The act of two or more parties coming together to agree to the terms of a contract.
Fraud
An intentional misrepresentation resulting in harm to a person or an organization.
Representation
A statement of alleged fact.
Material fact
A fact that is significant to a decision or matter at hand.
Rescission
A legal act of canceling something (like a contract) and making it void.
Unilateral mistake
A perception by one party to a contract that does not agree with the facts.
, Bilateral mistake
A perception by both parties to a contract that does not agree with the facts.
All rights reserved.
A perception by both parties to a contract that does not agree with the facts.
Duress
The use of restraint, violence, threats of violence, or wrongful pressure to compel a party to
act contrary to his or her wishes or interests.
Undue influence
The improper use of power or trust to deprive a person of free will and substitute another's
objective, resulting in lack of genuine assent to a contract.
Uniform Commercial Code (UCC)
A model code that has been adopted in whole or in part by each state and whose purpose is to
provide a consistent legal basis for business transactions throughout the United States and its
territories.
Parol evidence rule
A provision that prevents the terms of a contract from being modified by evidence of oral or
other agreements after the contract has been written.
Statute of frauds
A law to prevent fraud and perjury by requiring that certain contracts be in writing and
contain the signature of the party responsible for performing that contract.
Real property (realty)
