Bus law chapter 10

77 terms by melodymyers

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the most common way to discharge one's contractual duties is by

the performance of those duties

A party may be discharged from a valid contract by

a condition occuring - or not occuring

A party may be discharged from a valid contract by

full performance or material breach by the other party

A party may be discharged from a valid contract by

agreement of the parties

A party may be discharged from a valid contract by

operation of the law

tender

an unconditional offer to perform by a person who is ready, willing, and able to do so

once your side has been tendered and the other party refuses to be perform you can

sue

conditions

a possible future event, the occurance or nonoccurance of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract

if the condition is not satisfied the obligations of the parties are

discharged

types of performance

complete and substantial

complete

when both parties perform exactly as agreed, or "perfect" and all conditions are satisfied

substantial

party in good faith performs substantially all of the terms of a contract

the party can enforce the contract under the doctrine of substantial performance

-confers most of the benefits promised
-performance must not vary greatly from what was promised
-damages can be awarded instead of performance

substantial performance is decided on a

case by case basis

substantial performance damages awarded are

the cost to bring the object of the contract into compliance with its terms

Material breach of contract

occurs when performance is not substantial AND non-breaching party is excused from performance and entitled to damages

any breach entitles the non-breaching party to sue for damages, but only a material breach...

discharges the non-breaching party from the contract

Anticipatory Repudiation occurs when

one party refuses to perform his contractual obligation before performance is due

Anticipatory Repudiation is treated as a

material breach and non breaching party can sue for damages IMMEDIATELY even though performance is not due

if no time for performance stated in the contract a...

reasonable amount of time is implied

if time for performance is stated to be "of the essence" or vital, it becomes...

a condition precedent to performance

discharge by recission is the process by which

a contract is cancelled and parties return to original position before agreement

mutual recission

for executionary contract, parties make a new contract that is oral or written

discharge by novation

parties agree to submit a third party for an original party

discharge by novation requirements

a previous valid obligation

discharge by novation requirements

an agreement by all parties to a contract

discharge by novation requirements

the extinguishing of the old obligation (discharge of prior party)

discharge by novation requirements

a new contract that valid

discharge by settlement

a compromise that arises out of a genuine dispute over the obligations under an existing contract will be recognized at law

discharge by settlement is recognized as a

new contract

discharge by accord: accord

contract to perform existing contractual duty not yet discharged

discharge by accord: satisfaction

performance of the accord

an accord and its satisfaction

discharge the original contract obligation

alteration of the contract

innocent party is discharged after material obligation

statutes of limitations

restrict the period during which a party can sue on a particular cause of action

bankruptcy

generally bars enforcement of non-exempt transaction

objective impossibility

the supervening event was not forseeable

3 objective impossibility situations

death or incapacitation in personal contract prior to performance

3 objective impossibility situations

destruction of the subject matter

3 objective impossibility situations

change i the law renders performance illegal

temporary impossibility

an occurance or event that makes a performance impossible for a temporary time period and operates to suspend performance until the impossibility ceases

commercial impracticality

when a supervening event does not render performance objectively impossible but does make it extremely difficult or costly and must not have been known by parties when contract made

frustration of purpose

supervening event makes it impossible to attain purpose both parties had in mind

frustration of purpose even must have not been

reasonably forseeable and decreases value of what a party receives under contract

4 broad categories of damages

compensatory damages (to cover direct losses & costs)

4 broad categories of damages

consequential damages (to cover indirect & forseeable losses)

4 broad categories of damages

punitive damages (to punish & deter wrongdoing)

4 broad categories of damages

nominal (to recognize wrongdoing when no monetary loss is shown)

compensatory damages compensate

non breaching party for loss of the bargain (out of pocket costs directly arising from the breach)

incidental damages

expenses cause directly by breach of contract

standard measure of compensatory damages

difference between value of promised performance and actual performance

sale of goods measurement of damages

difference between contract and market price

sale of land measurement of damages

specific performance because each parcel of land is so unique

construction contracts

varies depending on which party breaches and when the time of the breach occurs

consequential damages

forseeable losses breaching party is aware or should be aware cause the injury party additional loss

punitive damages

punish or deter future conduct

nominal damages

no actual damage or financial loss only a technical injury is involved

awards in nominal damages are normally small but does

establish a wrongdoer

mitigation of damages

when a breach of contract occurs, the innocent, injured party is held to a duty to reduce the damages that he/she suffered (duty depends on the contract)

liquidated damages provisions

specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract

liquidated damages are frequently used in

construction and sale of goods contracts

court asks two questions to determine if liquidated damages provisions are enforceable

When the contract was entered into, was it apparent that damages would be difficult to estimate in the event of a breach?

court asks two questions to determine if liquidated damages provisions are enforceable

Was the amount set as damages a reasonable estimate and not excessive

Equitable remedies

sometimes damages are an inadequate remedy- court can create an equitable remedy

recission

an action to undo, or terminate, a contract and restore parties to original positions that were occupied prior to the contract

restitution

both parties must return goods, property, or money previously conveyed

recission does not always call for

restitution

restitution does not always involve in cases of

recission

specific performance

equitable remedy calling for the performance of the act promised in the contract

specific performance provides cases involving

unique subject matter (sale of land sale of personal services)

reformation

equitable remedy allowing a contract to be reformed or rewritten to reflect the parties true intentions

reformation is available when an agreement is

imperfectly expressed in writing

reformation is used when

fraud or mutual mistakes occur

waiver of breach occurs when

non breaching party accepts defective performance of contract

exculpatory clauses

provisions stating no damages can be recovered

limitation of liability clauses

provisions that affect the availability of certain remedies

limitation of liability clauses depends on

type of breach excused by the provision to be enforceable

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