Chapter 20 Discharge And Remedies

Front 1

what are the four requirements of a valid contract?

Back 1

1. agreement

2. consideration.

3. Legality.

4. Capacity

Front 2

when a party's obligations under a contract are terminated, the party is said to be ?

Back 2

discharged

Front 3

what is a conditional contract?

Back 3

When a party's duty to perform may be affected by whether a certain condition occurs.

Front 4

How are conditional contracts known?

Back 4

they can either be implied by law or expressly inserted into the contract by the parties.

Front 5

what is condition precedent?

Back 5

is a particular event that must occur in order for a party's duty to arise. If the event does not occur, the party's duty to perform does not arise.

Front 6

what is a common example of condition precedent?

Back 6

life insurance - the life insurance company's duty to perform triggers when the person dies.

Front 7

what is condition subsequent?

Back 7

a future event that terminates the obligations of the parties when it occurs.

Front 8

Concurrent conditions is when?

Back 8

when the party's performance is conditioned on the performance of the other. They occur only when the parties are required to perform for each other simultaneously.

Front 9

what is an express condition?

Back 9

are explicitly stated in the contract and are usually preceded by words such as conditioned on, if provided that, or when.

Front 10

what is an implied condition?

Back 10

an implied condition are those that are not explicitly stated but are inferred from the nature and language of the contract.

Front 11

what are the ways to discharge a contract?

Back 11

Performance, agreement, operation of law, by changed circumstances.

Front 12

what is exactly on time or discharge by performance?

Back 12

parties discharge their obligations by doing what they respectively agreed to do under the terms of the contract.

Front 13

what is tender?

Back 13

The offer of performance. (when the guy shows up with the equipment he has offered tender).

Front 14

what are the ways to discharge by performance

Back 14

complete performance, substantial performance. and material breach due to late performance, and anticipatory repudiation.

Front 15

what is complete performance?

Back 15

Complete performance is when all aspects of the parties' duties under the contract are carried out perfectly. However complete performance is difficult to obtain.

Front 16

what type of performance do most courts require?

Back 16

substantial performance.

Front 17

Time is of the essense claus

Back 17

may mean that one party to the contract must perform its contractual obligations at a specific date and time as required in order to compel performance by the other party to the contract. A failure to perform by the time specified will be a material breach of the contract.

Front 18

material breach due to late performance

Back 18

the party can sue you, because the other party breached. I can go to court and force the other party to pay. I can also say sue him because I had to go elsewhere. Where should I be if the contract was performed?

Front 19

what is a substantial performance?

Back 19

I did not do everything quite right , but I made a good try; however, the other party will still be able to sue

Front 20

what are the elements of substantial performance?

Back 20

The elements of substantial performance are when there is completion of nearly all the terms of the agreement, an honest effort to complete all the terms, and no willful departure from the terms of the agreement.

Front 21

what does substantial performance do?

Back 21

discharges the party's responsibilities under the contract, although the court may require that the party compensate the other party for any loss in value caused by the failure to meet all the standards set forth in the contract.

Front 22

what is an example of substantial performance?

Back 22

if I have contracted with someone to paint my house, I want all the walls to be painted bright white, and the contractor says no problem. I come back and the rooms are eggshell white. Performance wise they did the action, but they missed the part of the color. The contractor said using this eggshell white, they cannot tell the difference. As the homeowner, I can sue for breach.

Front 23

why is there litigation over substanital performance?

Back 23

there is litigation because it is hard to tell whether there has been substanital performance.

Front 24

what does a material breach do?

Back 24

discharges the nonbreaching party from his obligations under the contract.

Front 25

when does a material breach occur?

Back 25

when a party unjustifiably fails to substantially perform his obligations under the contract.

Front 26

what is anticipatory repudiation

Back 26

When the contracting party cannot complete the contract before the actual time of performance. When this happens, the breaching party may convey the anticipatory breach to the non breaching party by expressing her intent to no longer perform or by taking an action that would be inconsistent with her ability to carry out the contract when performance was due. The nonbreaching party is discharged and can look for another contract. They can sue or not sue or give the party who repudiated an opportunity to change their mind and perform.

Front 27

what are nominal damages?

Back 27

• If there are not damages the court can find in favor of the plaintiff and file for nominal damages – The plaintiff can get $1. It sends a message to the defendant that they are liable. They can award the plaintiff court costs. It sends a message. It is not a bad thing.

Front 28

what falls under a discharge by agreement?

Back 28

accord and sanctification, Novation, Mutual Recission, and conditional contract.

Front 29

what is mutual rescission?

Back 29

When both parties agree that they simply wish to discharge each other from their mutual obligations and therefore rescind or cancel the contract.

Front 30

what is a substituted contract?

Back 30

instead of cancelling the contract and terminating their relationship, the parties wish to substitute a new agreement in place of the original.

Front 31

what is accord and satisfication?

Back 31

Accord and satisfication occurs when one of the parties wishes to substitute a different performance for his or her original duty under the contract. It can also occur if there is an liquidated debt. The promise to perform the new duty is called the accord and the actual performance of that duty is the satisfaction.

Front 32

what discharges the parties in accord and satisfiaction?

Back 32

satisfaction ;)

Front 33

what is a novation?

Back 33

when the parties want to replace one of the parties with a third party. This substitution is called a novation. The original duties remain the same under the contract, but one party is discharged and the third party now takes that original party's place. All 3 parties must agree to the novation for it to be valid.

Front 34

how can a contract be discharged by operations of law?

Back 34

Alteration of contract, bankruptcy, tolling of the statute of limitations

Front 35

what is an alteration of contract?

Back 35

when one of the parties changes the material writings in a contract, the innocent party is discharged from that new contract to which he or she failed to agree upon.

Front 36

bankruptcy

Back 36

It is when a party files for bankruptcy and the court allocates the assets of the bankrupt among the bankrupt's creditors and then issues the party a discharge in bankruptcy. Once the assets have been distributed, all of the bankrupt's debts are discharged.

Front 37

Does the person who is filing for bankruptcy have to pay the creditors back?

Back 37

yes, unless the court states otherwise.

Front 38

what is a stay?

Back 38

It puts a stay- on the creditors to collect. It freezes the creditors from coming after you. Stay – no collection efforts can come after you.

Front 39

where is the only place you can claim for bankruptcy?

Back 39

the federal court

Front 40

what is a statute of limitations?

Back 40

a statute of limitations says that Once the 4 years is up after the day of the breach, no parties can sue. The statute sets up a law that allows for the parties to only have a certain time limit in which legal action can take place. The parties after the statute, are no longer bound to perform.

Front 41

what falls under change by circumstances?

Back 41

Frustration of Purpose, Impossibility of Performance, and Commercial impracticability.

Front 42

what is impossibility of performance.

Back 42

when an unforseen event occurs that makes it physically or legally impossible for a party to carry out the terms of the contract. The party is discharged on grounds of impossibility of performance.

Front 43

what is objective and subjective impossibility?

Back 43

Objective impossibility is when it is in fact not possible to lawfully carry out one's contractual obligations.

Subjective Impossibility, it would be very difficult to carry out the contract.

Front 44

does subjectice or objective impoissibility discharge the parties obligations under a contract.

Back 44

objective.

Front 45

where do courts find objective impossibility?

Back 45

1. Destruction of Subject matter.

2. death or incapacity of a party whose personal services are necessary to fulfill the terms of the contract.

3. Subsequent Illegality.

Front 46

What is commercial Impracticability.

Back 46

When performance is still objectively possible but would be extraordinarily injurious or expensive to one party. Due to an unforseeable event, one party would incur unreasonable expense, injury, or loss if that party were forced to carry out the terms of the agreement.

Front 47

what is frustration of purpose?

Back 47

When a contract is entered into, both parties recognize that the contract is to fullfill a particular purpose. The reason why the contract is made is because of the purpose. If factors arise beyond the control of the parties, the event does not occur and neither party assumed the risk of the event's nonoccurence.

Front 48

how did the frustration of purpose doctrine arise ?

Back 48

Coronation in England. Numerous parties contracted for rooms along the parade route, and the king became ill and the coronation was cancelled.