AIC 301 Chapter 1: Understanding the
Basics of Contracts
Contract - Answers -A legally enforceable agreement between two or more parties.
Promisor - Answers -The party to a contract making a promise.
Promisee - Answers -The party to a contract to whom a promise is made.
Privity of contract - Answers -The relationship that exists between the parties to a
contract.
Third-party beneficiary - Answers -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 - Answers -The failure, without legal excuse, to fulfill a contractual
promise.
Offeror - Answers -The party to a contract who promises to give something in return for
a promise or an act by another party.
Offeree - Answers -The party to a contract who makes a promise or acts in return for
something offered by another party.
Uniform Commercial Code - Answers -A code of federal laws that govern commercial
transactions in the United States.
Bilateral contract - Answers -A contract in which each party promises a performance.
Unilateral contract - Answers -A contract in which only one party makes a promise or
undertakes the requested performance.
Executed contract - Answers -A contract that has been completely performed by both
parties.
Executory contract - Answers -A contract that has not been completely performed by
one or both of the parties.
Express contract - Answers -A contract whose terms and intentions are explicitly stated.
Basics of Contracts
Contract - Answers -A legally enforceable agreement between two or more parties.
Promisor - Answers -The party to a contract making a promise.
Promisee - Answers -The party to a contract to whom a promise is made.
Privity of contract - Answers -The relationship that exists between the parties to a
contract.
Third-party beneficiary - Answers -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 - Answers -The failure, without legal excuse, to fulfill a contractual
promise.
Offeror - Answers -The party to a contract who promises to give something in return for
a promise or an act by another party.
Offeree - Answers -The party to a contract who makes a promise or acts in return for
something offered by another party.
Uniform Commercial Code - Answers -A code of federal laws that govern commercial
transactions in the United States.
Bilateral contract - Answers -A contract in which each party promises a performance.
Unilateral contract - Answers -A contract in which only one party makes a promise or
undertakes the requested performance.
Executed contract - Answers -A contract that has been completely performed by both
parties.
Executory contract - Answers -A contract that has not been completely performed by
one or both of the parties.
Express contract - Answers -A contract whose terms and intentions are explicitly stated.
