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Businessballs - business contracts legal terms Category: Legal > business contracts legal terms Date & country: 10/01/2008, UK Words: 121

Damages
money paid as the normal remedy in the law as compensation for an individual or company's loss. If another type of remedy is wanted (such as an injunction

Covenant
a promise within a contract for the performance or non-performance of a specified act.

Conveyance
a deed that conveys property rights.

Consumer
a person who buys goods or services but not as part of their business. A company can be a consumer for contracts not related to its business

Consideration
in a contract each side must give some consideration to the other. Often referred to as the quid pro quo

Consensus ad idem
agreement on an idea. This is the concept that the parties to the contract must all be in agreement on the basis of the contract. If it is discovered that the parties were thinking different things, then there is no consensus and the contract is void.

Confidentiality agreement
an agreement made to protect confidential information if it has to be disclosed to another party. This often happens during negotiations for a larger contract, when the parties may need to divulge information about their operations to each other. In this situation, the confidentiality agreement forms a binding contract not to pass on that informati …

Conditions
major terms in a contract. Conditions are the basis of any contract and if one of them fails or is broken, the contract is breached. These are in contrast to warranties, the other type of contract term, which are less important and will not usually lead to the breach of the contract

Company seal
an embossing press used to indicate the official signature of a company when accompanied by the signatures of two officers of the company. Since 1989 it has been possible for a company to indicate its agreement without use of the seal, by two signatures (directors or company secretary) plus a formal declaration. However, some companies still prefer …

Comfort letters
documents issued to back up an agreement but which do not have any contractual standing. They are often issued by a parent or associate company stating that the group will back up the position of a small company to improve its trading position. They always state that they are not intended to be legally binding. Also known as letters of comfort.

Collective agreement
term used for agreements made between employees and employers, usually involving trade unions. They often cover more than one organization. Although these can be seen as contracts, they are governed by employment law, not contract law.

Caveat emptor
buyer beware. This is a general rule that it is up to the buyer to find out if what they are buying is what they want. Consumer regulations require certain information to be disclosed to consumers and insurance contracts are covered by the uberrimae fides

Break clause
a clause that allows a tenant to end a lease at specific times during the period of the lease.

Breach of contract
failure by one party to a contract to uphold their part of the deal. A breach of contract will make the whole contract void and can lead to damages being awarded against the party which is in breach.

Bona vacantia
vacant property. Refers to a situation where property or goods end up not being owned by anyone. This can happen if a person dies without heirs or a company is struck off without all its property being distributed. It can also occur where a contract becomes void and property under it cannot be restored to an owner. In the UK, any such property then …

Bona fide
in good faith. Usually implies an amount of trust that the parties are acting without any hidden motives. The opposite is mala fides

Bankruptcy
the formal recognition that a person cannot pay their debts as they are due. Note this only applies to individuals, companies and partnerships that become insolvent are wound up.

Arbitration
using an independent third party to settle disputes without going to court. The third party acting as arbitrator must be agreed by both sides. Contracts often include arbitration clauses nominating an arbitrator in advance.

Agent
somebody appointed to act on behalf of another person (known as the principal). The amount of authority to deal that the agent has is subject to agreement between the principal and the agent. However, unless told otherwise, third parties can assume the agent has full powers to deal.

Acceptance
the unconditional agreement to an offer. This creates the contract. Before acceptance, any offer can be withdrawn, but once accepted the contract is binding on both sides. Any conditions have the effect of a counter offer that must be accepted by the other party.

Ab initio (ab init)
from the beginning. Can mean that breaking some terms in a long-running contract results in the contract having been broken from the start.