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77 terms

Bus law chapter 10

STUDY
PLAY
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