The following is a list of important Contract Law terms (I through M) and their definitions.

Illusory Promise: an illusory promise is an expression which resembles promissory terms, but in actuality imposes no obligation upon the party making it.

• expression that resembles promissory terms BUT
• imposes no obligation upon party making it.

Implied Condition of Cooperation: implied in a contract whenever the cooperation of the promisee is necessary for the performance of the promise.

• implied in a contract
• whenever the cooperation of the promisee is necessary
• for the performance of the promise.
  

Implied in Fact Conditions: conditions which are necessary to the performance of the contract between the parties and therefore are deemed to have been intended by the parties, but are not expressly stated.

• necessary to the performance of the contract
• not expressly stated

Implied in Fact Contract: contract that is inferred by the law because the acts or conduct of the parties and the surrounding circumstances make it reasonable to assume that a contract exists between them even though the contract is never manifested by words.

• contract inferred by the law
• conduct of parties and circumstances make it reasonable to assume contract exists
• even though contract is never manifested by words

Implied in Law Contract (Quasi Contract): contract that is imposed by operation of law to do justice even though it is clear that no promise was ever manifested by words or ever intended. This contract occurs when one party accepts or retains benefits that have been conferred upon him by another party who expected to be paid and who was not a volunteer.

• contract
• imposed by operation of law to do justice even though it is clear that no promise was ever manifested by words or ever intended. This contract occurs when one party accepts or retains benefits that have been conferred upon him by another party who expected to be paid and who was not a volunteer.

Incidental Beneficiary: one who may receive the benefit of the performance of the contractual provisions only incidentally and was neither intended to receive the performance as a gift nor in satisfaction of a debt. An incidental beneficiary does not have standing to sue for purposes of attempting to enforce the contract.

• one who may receive the benefit of the performance of a contract only incidentally
• does not have standing to sue

Intended Beneficiary: one in whom the creation of an obligation in his or her favor was contemplated by the original parties to the contact.  A third party must be an intended beneficiary in order to have a “Standing to Sue” when attempting to enforce the provisions of the contract.

• one contemplated by the original parties to the contact.
• must be an intended beneficiary in order to have a “Standing to Sue”

Lawrence v Fox: landmark case that held that a third party beneficiary has the right to enforce the contract which would confer a benefit upon said third party.

• landmark case
• held that a third party beneficiary has right to enforce the contract which would confer a benefit upon said third party.

Legal Detriment: promise to do something that one is not legally obligated to do or to refrain from doing something that one is legally privileged to do.

• promise
• to do something one not legally obligated to do OR
• to refrain from doing what one is legally privileged to do

Liquidated Damages: damages that are agreed to in a contract in advance of any breach of contract and will be enforced by the courts if deemed reasonable.

• damages agreed to in a contract
• enforced by the courts (if deemed reasonable)

Material vis-a-vis Minor Termination Breach: If a breach is material in nature, plaintiff is justified in treating the entire transaction as ended and may thereafter sue for damages.  However, if the breach is minor in nature, plaintiff has a cause of action for damages caused by the breach.  Contract remains in effect.

• material breach ends transaction
• plaintiff may sue for damages
• minor breach creates cause of action for damages
• BUT contract remains in effect

Meeting of the Minds: Most jurisdictions hold that a contract is not formed until there has been a meeting of the minds according to the intentions of the parties.

• contract not formed until meeting of minds
• according to parties’ intent.

Merger: merger is said to have occurred in a contractual situation when one contract supersedes or incorporates another.

Merit Music v Sonneborn: Court held that absence of fraud, duress, or material mistake a party to a contract with the capacity to understand a written document will be bound by his/her signature whether or not they read the document.

• party to contract
• absence of fraud, duress, or material mistake
• with capacity to understand written document
• will be bound by his/her signature, whether or not read document.

Mitigation of Damages: refers to efforts of the non-breaching party to mitigate, or limit, his or her damages that could occur from the other party’s non-performance. The law requires that the non-breaching party make an effort to mitigate damages.

• mitigation of damages refers to efforts to limit the effect of a breach of contract
• law requires non-breaching party to make reasonable efforts to mitigate damages

Modification: a subsequent agreement entered into for consideration for purposes of modifying the prior contract.  Only evidence related to agreements made prior to or at the same time as the written contract will be excluded as inadmissible under the previously mentioned Parol Evidence Rule.  Therefore, the Parole Evidence Rule does not apply to modifications.

• subsequent agreement
• that modifies the prior written contract
• Parole Evidence issue does not apply to modifications

Moral Obligation Rule: applies when promisor received from promisee something of value so as to create a moral obligation (and a later promise) to pay for that which was received.  This would result in a finding of consideration for such a promise. The promise can be implied by an acknowledgment of a debt or by part payment of the debt.

• Often re: promises to pay previously entered gratuitous services, or to pay debts barred by statute of limitations or discharged in bankruptcy

Mutual Assent: Mutual assent relates to the requirement of an initial agreement between the parties to enter into a contractual relationship and is established if a valid offer has been made by one party with a valid acceptance having been given by the other prior to the termination of the offer.

• Valid Offer
• Valid Acceptance
• Acceptance has become effective prior to termination of offer