| Glossary |  

Unit 5 Contract law: Glossary



The act of agreeing to an offer.


A failure to do what is promised.

Common mistake

Both parties to a contract make the same mistake.


An essential or fundamental term in a contract.

Condition precedent

A condition that must be satisfied before the contract can be enforced.

Condition subsequent

A term in a contract that provides that on the happening of a particular event the contract will terminate.


Mutual rights and promises made by the parties to a contract.


An agreement that gives rise to legal rights and obligations between the parties that will be enforce by the courts.

Counter offer

The rejection of an offer by the making of an alternative offer.


An amount of money payable to a person to compensate that person for a loss.


A type of formal contract that requires no consideration.


To extinguish a legal obligation.

Doctrine of privity of contract

Provides that only the parties to a contract can sue or be sued on a contract.


Threats of, or use of, force that deprives an innocent party of exercising their free will.

Exclusion clause

A clause that tries to exclude or exempt liability of one of the parties to a contract.

Formal contract

A contract not requiring consideration.


The discharge of a contract rendered impossible of performance because of some happening or event outside the control of the parties.

Illegal contract

A contract where the purpose or object of the contract is illegal.


A discretionary order issued by a court in its equitable jurisdiction that prevents a party from performing or continuing to perform a particular act.

Invitation to treat

An invitation to a person to make an offer.


A person under the age of 18 years.


A false statement of fact, which may be innocently, negligently or fraudulently made.

Mutual mistake

Both parties to a contract are mistaken but their mistakes are different.


A proposal made by a person to another to enter a legally binding agreement. An offeree is the person to whom an offer is made, while the offerer is the person who makes the offer.


An assurance given that a person will do or not do something. A promisee is the person to whom a promise is made, while the promisor is the person who makes the promise.


To affirm or the act of adopting a contract by a person who was not bound to it originally.


Legal ways by which wrongs and losses are redressed.


A statement of fact.

Rescission of contract

The termination of a contract by one or both parties.

Simple contract

A contract that is not a formal contract.

Specific performance

An equitable remedy compelling a person to carry out their obligations when damages would be an inadequate remedy for the breach of an agreement. It is usually not available for contracts of personal service.


A contract that is unreasonable or unfair.

Undue influence

Where a person uses their influence over another to force the other to enter a contract.

Unilateral mistake

One party to a contract is mistaken and the other party knows, or should know, of their mistaken belief.

Unenforceable contract

A contract that is not able to be enforced.

Void contract

A contract that has no legal effect.

Voidable contract

A contract that one party, usually the injured one, can set aside.


A term of a contract that is not of fundamental importance. It is collateral to the main purpose of the contract.