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Basic Contract Law Terminology

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Undue Influence

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Unfair manipulation of another party into signing a contract, exploiting a position of power.

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Breach of Contract

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A failure by one of the parties to fulfill their obligations as specified in the contract.

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Specific Performance

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A legal remedy in which a court orders the breaching party to perform the contract, typically in cases where money damages are inadequate.

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Assignment

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The transfer of contractual rights by a party to another party who was not originally in the contract.

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Consideration

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Something of value exchanged between parties that is necessary for a contract to be enforceable.

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Express Contract

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A contract in which the terms are stated explicitly, usually in writing or verbally.

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Statute of Frauds

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A legal principle that requires certain types of contracts to be in writing to be enforceable.

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Parol Evidence Rule

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A rule preventing the introduction of evidence of prior or contemporaneous negotiations that contradict the written agreement.

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Impossibility

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A defense to a breach of contract claim where performance is objectively impossible due to external circumstances.

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Mutuality

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A mutual obligation on the contracting parties; both must be bound to perform their obligations.

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Acceptance

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An expression of assent to the terms of an offer; must be unequivocal and communicated to the offeror.

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Executory Contract

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A contract under which one or more parties have not yet completed performance.

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Unenforceable Contract

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A contract that cannot be enforced due to a technical defect.

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Liquidated Damages

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An amount of money agreed upon by both parties to a contract that one will pay to the other upon breaching.

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Implied Contract

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A contract formed by the conduct of the parties rather than written or spoken words.

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Capacity

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The legal ability to enter into a contract, typically requiring parties to be of a certain age and sound mind.

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Reformation

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A court-ordered correction or modification of a contract to reflect what the parties actually intended.

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Offer

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A proposal by one party to another to enter into a legally binding agreement.

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Duress

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Improper threat or use of force to coerce a party into a contract, making it voidable.

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Voidable Contract

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A valid contract that can be legally avoided or set aside by one of the parties.

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Novation

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The substitution of a new contract in place of an old one, with a new party replacing an original party.

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Delegation

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The transfer of contractual obligations by a party to another party to perform the duties agreed upon in the contract.

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Injunction

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A court order compelling a party to do or refrain from specific acts.

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Frustration of Purpose

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When an unforeseen event undermines the fundamental reason for entering into a contract, both parties may be released from their obligations.

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Mitigation of Damages

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The duty of a party who has been injured by a breach to take reasonable steps to minimize their damages.

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Rescission

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The cancellation of a contract by a court, with the parties being restored to their respective positions prior to the contract being formed.

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Accord and Satisfaction

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An agreement between the parties to accept performance different from what was originally agreed upon in the contract, followed by the performance of the new obligation.

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Void Contract

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A contract that is not legally enforceable from its inception.

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Executed Contract

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A contract in which both parties have fulfilled their respective duties.

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Consequential Damages

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Damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation.

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