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22 terms

BUSINESS LAW CHAPTER 10

CONTRACT PERFORMANCE, BREACH, AND REMEDIES
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ANTICIPATORY REPUDIATION
An assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time.
BREACH OF CONTRACT
The failure, without legal excuse, of a promisor to perform the obligations of a contract.
COMMERCIAL IMPRACTICABILITY
A doctrine under which a seller may be excused from performing a contract when (1) a contingency occurs, (2) the contingency's occurrence makes performance impracticable, and (3) the nonoccurrence of the contingency was a basic assumption on which the contract was made. Despite the fact that UCC 2-615 expressly frees only sellers under this doctrine, courts have not distinguished between buyers and sellers in applying it.
COMPENSATORY DAMAGES
A money award equivalent to the actual value of injuries or damages sustained by the aggrieved party.
CONDITION
A possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract.
CONSEQUENTIAL DAMAGES
Special damages that compensate for a loss that is not direct or immediate (for example, lost profits). The special damages must have been reasonably foreseeable at the time the breach or injury occurred in order for the plaintiff to collect them.
DISCHARGE
The termination of an obligation. (1) In contract law, discharge occurs when the parties have fully performed their contractual obligations or when events, conduct of the parties, or operation of the law releases the parties from performance. (2) In bankruptcy proceedings, the extinction of the debtor's dischargeable debts.
DISCHARGE IN BANKRUPTCY
The release of a debtor from all debts that are provable, except those specifically excepted from discharge by statute.
FRUSTRATION OF PURPOSE
A court-created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists (due to reasons beyond that party's control).
IMPOSSIBILITY OF PERFORMANCE
A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes impossible or totally impracticable (through no fault of either party). Also known as Implied contract.
LIQUIDATED DAMAGES
An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.
MINIGATION OF DAMAGES
A rule requiring a plaintiff to have done whatever was reasonable to minimize the damages caused by the defendant.
MUTUAL RESCISSION
An agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract. The object of the agreement is to restore the parties to the positions they would have occupied had no contract ever been formed.
NOMINAL DAMAGES
A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty
NOVATION
The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. Typically, there is a substitution of a new person who is responsible for the contract and the removal of an original party's rights and duties under the contract.
PERFORMANCE
In contract law, the fulfillment of one's duties arising under a contract with another; the normal way of discharging one's contractual obligations.
PENALTY
A sum inserted into a contract, not as a measure of compensation for its breach but rather as punishment for a default. The agreement as to the amount will not be enforced, and recovery will be limited to actual damages.
REFORMATION
A court-ordered correction of a written contract so that it reflects the true intentions of the parties.
RESTITUTION
An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been in had the breach not occurred.
SPECIFIC PERFORMANCE
An equitable remedy requiring the breaching party to perform as promised under the contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property).
TENDER
An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so.
WAIVER
An intentional, knowing relinquishment of a legal right.