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28 Cards in this Set
- Front
- Back
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What is a condition precedent? |
A condition that must occur before the contract is in effect. (Ex: When buying a home, the agreement states the house must pass inspection before you will agree to buy.) |
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What is a condition subsequent? |
A condition that occurs after the contractual duty arises. (Ex: Your insurance policy states that if you don't give notice of an accident within one year of the date it occurred, the insurance company's duty to pay on the claim is excused.) |
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What is an installment contract? |
A contract where goods are delivered in more than one delivery. - Occurs when the contract in fact calls for multiple delivers or there are multiple delivers implied due to lack of storage capacity. |
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Define "Express Contract" |
A contract that is formed by language, oral or written (formation) |
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Define "Implied Contract" |
Formed by manifestation of assent other than oral or written language...by conduct (formation) |
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Define "Quasi-Contract" |
(1) not really a contract at all (2) construed by the courts to avoid unjust enrichment by permitting an action in restitution (formation) |
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Define "Bilateral Contract" |
A contract that consists of the exchange of mutual promises (acceptance) Ex: I promise to sell abc, you promise to pay x dollars for it in exchange |
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Define "Unilateral Contract" |
A contract that requests performance rather than a promise. The offeror promises to pay upon the completion of the requested act. |
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What is the goal of remedies in contracts? |
To put the parties in the same position had the contract been performed. |
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Define "Anticipatory Repudiation" |
Stems from words or conduct of the promisor unequivocally indicating that he cannot or will not perform under the contract when the time comes. (Ex: A contract is signed and to be performed later. After the contract but before performance, one of the parties indicates by words or actions, that they won't perform on the contract.) |
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What are the remedies for an anticipatory repudiation? |
1. Treat the anticipatory repudiation as a total repudiation and sue immediately. 2. Suspend his own performance and wait to sue until the performance date. 3. Treat the repudiation as an offer to rescind and treat the contract as discharged. 4. Ignore the repudiation and urge performance. |
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When is the remedy of Specific Performance available? |
When the legal remedy is inadequate. The legal remedy is generally inadequate when the subject matter of the contract is rare or unique (such as land). Not available for service contracts as it would be tantamount to involuntary servitude. Can apply to non-compete contracts. |
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What is the purpose of Compensatory Damages? |
- to give compensation for breach of contract - to put the non-breaching party where he would have been had the promise been performed |
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What are Expectation Damages? |
Sufficient damages for non-breaching party to buy a substitute performance In most cases, the plaintiff's standard measure of damages will be based on an "expectation" manner. |
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What are Reliance Damages? |
This measure is applied if the plaintiff's expectation damages will be too speculative to measure. Reliance damages: - award the plaintiff the cost of his performance - designed to put the plaintiff in the position he would have been in had the contract never been formed |
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What are Consequential Damages? |
Damages that consist of losses resulting from the breach that any reasonable person would have foreseen would occur from a breach at the time the contract was entered. * In contracts for the sale of goods, only a buyer may recover consequential damages |
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What are Incidental Damages? |
In contracts for the sale of goods, compensatory damages may also include incidental damages. Incidental damages include expenses reasonably incurred by the buyer incident to the breach. |
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When are punitive damages awarded in contract cases? |
Punitive damages are generally not awarded in contract cases. |
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What are Nominal Damages? |
They are token damages that may be awarded where a breach is shown but no actual loss is proven. |
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What are Liquidated Damages? |
Liquidated damages is a fixed amount of money to be paid in the event of a breach, stipulated by both parties in the contract. A liquidated damages clause will be enforced if: (1) damages for a breach were difficult to estimate or ascertain at the time the contract was formed; and (2) the amount agreed upon is a reasonable forecast of damages rather than a penalty. |
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What is a Third-Party Beneficiary? |
A party that is poised to benefit from a contract but is not aparty to the contract. A third-party beneficiary may file an action against thepromisor to enforce the contract. |
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What are the types of Third-Party Beneficiaries? |
1. Intended - party that is intended to benefit from a contract andhas the ability to enforce the contract once the intended beneficiary's rights havevested 2. Incidental/unintended - party that is not intended to benefit from a contractand may not file an action if the contract is breached |
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When/how is an Intended Beneficiary's rights vested? |
An intended beneficiary's rights vest when: (1) The beneficiary justifiably relies on the contract and materially changesher position; (2) The beneficiary makes known her agreement to the contract's performancein a way solicited by the contracting parties; or (3) The beneficiary files an action to enforce the contract. |
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What is "delegation?" |
A transfer of a party's duties under a contract. |
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What contractual duties are delegable? |
In general, all duties are delegable except if: a. A contractual clause forbids delegation; b. The duties involve unique skills; or c. The delegate's performance will substantially alter the obligee's expectations. |
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What is an "assignment?" |
A transfer of a party's rights under a contract |
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How does an Assignment become effective? |
The assigned right must be: a. Adequately described; and b. The assignor must objectively intend to transfer her rights immediately andcompletely. c. Interests in real property, assignments for security interest purposes, and wageassignments must be in writing. |
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What rights are transferable under Assignment? |
Most rights are transferable. However, the following assignments are noteffective: a. Assignments that are restricted by legal process; b. Assignments that substantially change the obligor's risk;c. Assignments of output and requirement contracts under common law; (1) However, the UCC allows the assignment of output and requirementcontracts if the quantity of the contractual terms is not changed in anunreasonably disproportionate way. d. Contracts that expressly forbid assignment; (1) A clause that restricts assignment only bars the delegation of the assignor'sperformance unless the surrounding circumstances suggest otherwise. e. Assignments of personal service contracts that involve unique services asopposed to standard services. |
