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Glossary
This section will take you through contractual terms. It is necessary to understand these terms if you are to successfully understand contract law.
| Terms | Definition |
|---|---|
| valid/validity | Legally binding |
| invalid/invalidate | Not able to be legally enforced |
| void | Not recognised legally/not able to be legally enforced |
| breach | Breaking/neglecting a legal obligation |
| agreement | Offer and acceptance |
| consideration | Something of value which is promised or exchanged by both parties |
| capacity | Relates to restrictions which may be placed on people's abilities to enter contracts |
| certainty | Terms of a contract must be clear; a contract may be declared invalid if there has not been genuine consent as to the terms of a contract |
| misrepresentation | To mislead a party in relation to a fact about the terms of a contract |
| mode of acceptance | Manner in which acceptance is made, eg in writing by fax, post, email etc. |
| Legality | A contract will not be enforced if it is illegal under common law or in breach of legislation |
Read the following questions and choose the right answer. You must answer all questions before clicking on the ‘Check Answer’ button.
Read the following statements and identify if they are true or false. You must answer all questions before clicking on the ‘Check Answer’ button.
Activity 1
Read the following questions and choose the right answer. Answers will be provided at the end of each question.
1. What does the term capacity mean?
- A) The power to learn or retain knowledge; mental ability.
- B) Restrictions which may be placed on a person’s ability to enter into a contract
- C) A metropolitan area
- D) Not legally recognized
Answer: A) The power to learn or retain knowledge; mental ability.
2. What does the term void mean?
- A) Pertaining to nothing
- B) Breaking a promise
- C) Not recognized legally
- D) Violating conditions of a contract
Answer: C) Not recognized legally
3. What does the term valid mean?
- A) Not able to be legally enforced
- B) Estimation of truth
- C) Legally binding
- D) Strength of character
Answer: C) Legally binding
4. What does the term certainty mean?
- A) Precise proceedings
- B) The judge will officiate
- C) Having full knowledge of the case
- D) Terms of a contract must be clear
Answer: D) Terms of a contract must be clear
5. What does the term breach mean?
- A) Lapse in a contract
- B) Legal break in a contract
- C) Not legally bound in a contract
- D) Breaking/neglecting a legal obligation
Answer: D) Breaking/neglecting a legal obligation
Activity 2
Read the following statements and identify if they are true or false. Answers will be provided at the end of each question.
1. Agreement means intention to trade?
Answer: false
2. Consideration means something that is given to both parties?
Answer: false
3. Invalidate means is not able to be legally enforced?
Answer: true
4. Misrepresentation is to mislead a party in relation to a fact about the terms of a contract?
Answer: true
5. Mode of acceptance is the manner in which something is accepted, e.g. email, fax, written etc.?
Answer: true