Chapter 11 - Contract Law (Part Iii)

Front 1

Performance

Back 1

reason for discharge of contract

A "tender of performance" made according to contract terms will discharge a party's duty to performance when the tendering party has the present ability to perform but the other party refuses to accept it.

Front 2

Illegality

Back 2

reason for discharge of contract

if subject of contract becomes illegal after the contract is formed, the contract will be discharged

Front 3

Impossibility

Back 3

reason for discharge of contract

must be objective (could not be performed by anyone) & must occur after the contract is formed

temporary impossibility suspends contract duties but doe not discharge them. Death or physical incapacity may discharge it.

Front 4

Impracticability

Back 4

reason for discharge of contract

the party requires to perform must encounter extreme and unreasonable difficulty or expense that could not have been reasonably anticipated.

Front 5

Frustration

Back 5

reason for discharge of contract

Something that happens that could not have been foreseen reasonably when the contract was formed (hurricane at Myrtle Beach; whole place a disaster area)

Front 6

Rescission

Back 6

reason for discharge of contract

both parties give up the right to performance by the other (have to be executory duties on both sides)

UCC says that the rescission of a contract for the sale of goods must be in writing when the original contract so requires

when one party wants to rescind and the other does, the other needs adequate legal grounds like mistake, duress, failure of consideration

Front 7

Modification

Back 7

reason for discharge of contract

If a contract is modified, the modification discharges those terms of the original contract that are the subject of the modification

Front 8

Accord and Satisfaction

Back 8

reason for discharge of contract

An accord is an executory promise by one party to give a substituted performance and by the other party to accept the substituted performance as discharge of an existing duty.

alone, it does not discharge the prior contract. rahter, it suspends the right to enforce the original contract in deference to the terms of the executory accord agreement.

Front 9

Account Stated

Back 9

reason for discharge of contract

an account stated is an agreement between parties concerning a final balance due from one party and payable to the other

Front 10

Substituted Contract

Back 10

reason for discharge of contract

A contract may be discharged by substituting a new contract in its place

Front 11

Novation

Back 11

reason for discharge of contract

when a new contract substitutes a different party to receive benefits and assume duties under the terms of the original contract

Front 12

Lapse

Back 12

reason for discharge of contract

When the duty of each party is a condition to the duty of the other party, contractual obligations may lapse if neither party performs when his performance is due

Front 13

Operation of Law

Back 13

reason for discharge of contract

when a party to a contract obtains judgment against the other for breach of contract, the contractual duty of performance is merged in the judgment, which discharges the contract.

Front 14

What is a breach of contract?

Back 14

1) a promisor is under an absolute duty to perform
and when
2) the duty of performance has not been discharged

Front 15

What are different types of breaches of contract?

Back 15

Material breach - if the promisee does not receive the substantial benefit of her bargain as a result of the promisor's failure to perform or as a result of the promisor's defective performance

Minor breach - if the promisee receive the substantial benefit of her bargain the promisor's defective perfomance

Timely Performance - when the defaulting party has a duty to perform immediately, her failure to perform is a breach

Front 16

When can you get a remedy for a contract?

Back 16

when a plaintiff hows both 1)material breach by the defendant and 2)no material breach by the plaintiff, a remedy is available to redress the breach

Front 17

What are different types of contract remedies?

Back 17

Damages
Specific Performance
Rescission
Reformation
Quasi-Contract
Tort Action

Front 18

What are different types of damages?

Back 18

Compensatory (general) damages
Consequential (specific) damages
Punitive Damages
Nominal Damages
Liquidated Damages

Front 19

Compensatory damages

Back 19

Awarded to a plaintiff to put her where she would have been if the contract had been performed by the other party.

Front 20

Consequential damages

Back 20

a plaintiff may be able to recover other losses incurred as a consequence of the breach provided that they were reasonably foreseeable at the time the contract was made; must prove a causal relationship

Front 21

Punitive damages

Back 21

Used to punish the defendant for bad conduct above and beyond a simple breach of contract.

Front 22

Nominal Damages

Back 22

May be awarded when the defendant has breached the contract but no monetary loss is proved.

Front 23

Liquidated Damages

Back 23

Damages agreed upon at the time the contract was formed.

Front 24

How does one measure damages when it involves a sale of goods.

Back 24

The UCC prescribes the remedies available to seller and the buyer

Front 25

How does one measure damages regarding the sale of goods for the seller

Back 25

If the buyer wrongfully rejects goods or fails to pay etc, there are six things they can do;

1) withhold delivery of the goods
2)stop delivery of the goods in the hands of a carrier
3) resell the goods and recover the difference from the defaulting buyer
4) cancel the contract
5) recover the contract price from the defaulting buyer under two conditions
6) recover ordinary contract damages for nonacceptance

Front 26

Expansion of seller's remedies #5

Back 26

You may recover the contract price from the defaulting buyer if 1) the goods have been accepted or, if conforming goods have been lost or damaged, within a reasonable time after the risk of loss passes to the buyer; or (b) the goods have been identified to the contract and the seller is unable to find another buyer

Front 27

Expansion of sellers' remedies #6

Back 27

You may recover ordinary contract damages for nonacceptance, measure as the difference between the marker price at the time and place for tender and the contract price, together with any consequential damages

Front 28

What are buyer's remedies for a sale of goods contract breached?

Back 28

1. cancel;
2. "cover" the purchasing substitute goods on the open market and recover from the seller the difference bw that and the contract price
3. recover specific goods identified to the contract if the buyer has paid all of a portion of the purchase price
4. Recover damages for nondelivery
5. Obtain specific performance in limited circumstances

Front 29

In regards to the buyer's remedy for a sale of goods breached, how does one recover damages for non-delivery?

Back 29

You measure the difference between the market price at the time when buyer learned of the breach and the contract price, together with any consequential damages.

Front 30

Measure of damages: Contracts for Sale of Land

Back 30

the difference between the contract price and the fair market value of the land at the time when the land was to have been conveyed

Front 31

Measure of damages: Construction Contracts (owner breaches)

Back 31

before it begins - builder receives profit she would have made on contract

during construction - builder receives the profit plus any costs that she incurred to date

after construction completed - builder receives the full contract price plus interest

Front 32

Measure of damages: Construction Contracts (contractor breaches)

Back 32

before - owner receives the cost of completion (the amount over the contract price that it will cost to complete the construction)

during - owner receives the cost of completion unless completion would entail economic waste

by late completion - Owner receives damages for loss of use (rental value) until construction i completed

Front 33

What is specific performance?

Back 33

An equitable remedy by which a party is ordered by a court to fulfill his or her contractual obligations. Plaintiff must demonstrate that there is no adequate remedy at law before it can be granted

Front 34

What are rescission and restitution?

Back 34

When a breach occurs, the non-breaching party may elect to rescind the contract

Restitution damages focus on the gains of the defendant; compensatory damages focus on the losses of the plaintiff

Front 35

What is reformation?

Back 35

Used in equity to correct errors in the document which contains the written terms of the parties' agreement. Cannot be used to change the terms to which the parties agreed.

Front 36

What is a quasi contract?

Back 36

Not a contract. It is a legal fiction created by equity courts to prevent unjust enrichment of a defendant at the expense of a plaintiff. Remedy to obtain the reasonable value of services or other performance when no contract exists.

Front 37

What is a tort action?

Back 37

Improper performance of a contract may results in tort liability of the injured party as well. ex: product liability; professional liability; and emotional distress