Bilateral contracts involve two parties exchanging mutual promises, where each party is both a promisor and a promisee, while unilateral contracts involve one party making a promise that the other party can accept only through performance. Understanding the distinction is crucial as it affects the formation, enforcement, and breach of contracts, impacting legal remedies and obligations.
Partial invalidity refers to a legal doctrine where a contract remains enforceable despite certain provisions being deemed unenforceable or void. This concept ensures that the valid parts of a contract can still be executed, maintaining the agreement's overall intent while disregarding the invalid sections.
A collateral contract is a secondary agreement that exists alongside a primary contract, often used to induce a party to enter into the main contract by providing additional assurances or terms. It requires its own consideration and must be consistent with the main contract to be enforceable, serving as a mechanism to address specific issues or concerns not covered in the primary agreement.
An incidental beneficiary is a third party who benefits from a contract between two other parties, but has no legal rights to enforce the contract. Unlike intended beneficiaries, incidental beneficiaries cannot sue to enforce the contract because the contracting parties did not intend to benefit them directly.
Consensus Ad Idem, a Latin term meaning 'meeting of the minds', is a fundamental principle in contract law that signifies mutual agreement between parties on the terms of a contract. Without this mutual understanding and agreement, a contract may be deemed void or unenforceable, as it indicates a lack of genuine consent to the contractual obligations.
Nominal consideration refers to a token amount, often a small sum like $1, given to satisfy the legal requirement of consideration in a contract, making it enforceable. It is used when the parties wish to formalize an agreement without exchanging substantial value, ensuring the contract is legally binding while focusing on the intent rather than the economic value exchanged.