Business Law - Key Concepts

A contractual requirement where both parties involved in the agreement are mistaken about a fundamental aspect of the contract, making the agreement null and void.

A mistake that is important enough to make the contract invalid. It significantly affects the subject matter or terms of the agreement.

A mistake made by only one party to the contract, while the other party is aware of the true facts.

Rules that are not legally enforceable. These rules often stem from societal expectations, ethical considerations, or religious beliefs.

A legal concept where the court creates a fictional contract to prevent one party from benefiting unfairly at the expense of another.

Deliberate deception or misrepresentation intended to induce another party to enter into a contract, leading to a loss or injury.

A legal doctrine that voids a contract if one party took unfair advantage of another due to factors like mental illness, intoxication, or lack of understanding.

Using force or coercion, either physical or mental, to pressure someone into entering a contract against their free will.

Taking unfair advantage of another person's weakness or trust due to a power imbalance in the relationship.

A requirement for a valid contract. It means both parties are capable of understanding the terms of the contract and entering into it voluntarily.

A binding agreement between two or more parties, where each party agrees to do something in exchange for something else.

A contract that is legally binding and enforceable upon both parties.

Occurs when a contract has been finalized, and the parties are legally obligated to uphold their agreed-upon terms.

A kind of contract where one party has the option to either enforce it or withdraw from it. The other party is bound to the contract, but their outcome depends on the decision of the party with the option.

A contract that is not legally binding or enforceable. It lacks essential elements, or it was created under illegal circumstances, making it invalid from the start.

A contract that can be either expressed or implied.

A contract where the terms of the agreement are clearly stated, either orally or in writing.

A contract that arises from the actions and behavior of the parties, rather than from explicit words or written agreements.

A contract where both parties have obligations. Each party agrees to do something in exchange for the other party's performance.

A contract where only one party makes a promise to do something, and the other party is not legally obligated to do anything in return.

A contract that is completed. All obligations have been fulfilled by all parties involved.

A contract that is still in progress. Some of the obligations remain to be fulfilled by one or more parties involved.

A clear statement or proposal expressing a willingness to be bound by certain specific conditions.

An agreement to the terms proposed in the offer.

A person who is authorized to act on behalf of another, carrying out tasks and making decisions as if they were the person they represent.

A legal principle signifying the end or fulfillment of the contract. It can be achieved through performance, agreement, breach, or operation of law.

A proposal or invitation that does not constitute a binding offer to enter into a contract. It merely initiates the negotiation process.

A unilateral obligation where one party voluntarily relinquishes or gives up a right or claim.

A non-binding agreement outlining the core terms and principles of a potential deal.

Document outlining the main terms of a proposed deal or agreement.

A preliminary agreement which specifies that two parties agree to reach a final agreement in the foreseeable future, with the agreement dependent on certain conditions being satisfied.

A person who is represented by an agent, giving the agent the authority to act on their behalf.

A written legal document that grants someone else the power to act on your behalf, like signing contracts or managing your finances.

A person authorized to act on behalf of another. They are not independent contractors

A person authorized to act on behalf of another. They are not always employees

When the third party in a transaction is aware that they are dealing with an agent, but they are not aware of the identity of the principal.

When a principal is prevented from appointing new agents in a given territory.

An agent who gets paid after the deal is closed. They are typically paid a commission.

A term of agreement that is not legally binding. They typically lay down key principles for a deal, but do not constitute a formal agreement.