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37 Cards in this Set
- Front
- Back
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What does discharged mean with respect to a contract? |
- A contract is discharged when the parties are relieved of the need to do anything more under the contract |
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What is the definition of performance of a contract? |
-Occurs when the parties fulfill all the obligations contained in the contract |
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In most situations is time of performance important? |
- Not usually important - However if a party does perform late it can be held liable for losses that the other party suffers as a result of the delay |
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Who has the primary obligation of locating the creditor and tendering (offering payment)? |
- The Debtor - The method of tender must be reasonable - The debtordoes not have to tender payment ifit would be obviously refused |
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Unless the contract says otherwise a creditor can insist on receiving payment in what form and why is this form risky? |
- Legal tender (cash) - The useof legal tender is risky because lost or stolen cash is extremely difficult to recover |
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What are some common payment options? |
- Debitcards: payment is final - Creditcards: payment made using credit card company - Cheques:conditional payment as bank may not honour, or customer may countermand (revoke) chequebefore cashed - PayPal:3PPS (third party payment system) |
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What is tender of performance? |
- Is involved when a contract requires the provision of goods or services - A party who owes an obligation is required to properly tender performance |
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What is substantial performance and what occurs when a substantially complete contract is discharged? |
- Generally satisfies the contract but is defective or incomplete in some minor way - If a contract is discharged by substantial performance, the innocent party is not required to pay for work that was not done – it would be reduced by the amount that the innocent party would reasonably pay a third party to perform the incomplete task |
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What is the definition of an entire contract? |
- Says that no part of the price is payable unless all of the work is done |
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What is discharge by agreement and what are the types of discharge by agreement? |
- When one or more parties can discharge a contract even though it was not fully performed - Option to terminate - Conditional contract - Recission - Accord and satisfaction - Release - Variation - Novation - Waiver |
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What is option to terminate? |
- Is a contractual provision that allows one or both parties to discharge a contractwithout the agreement of the other |
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What are the two types of conditional contract? |
- Condition subsequent - True Condition precedent - Condition precedent |
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What is condition subsequent? |
- Is a contractual term that states that the agreement will be terminated if acertain event occurs - For example, tickets to open-air concerts are conditional on weather. If it rains, the ticketholder will either be offered tickets to another event or be given a refund |
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What is true condition precedent? |
- Is a contractual term that states that an agreement will come into existenceonly if and when a certain event occurs - For example, making a contract conditional on the government passing a certain law |
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What is condition precedent? |
- Is a contractual term that states that while a contract is formed immediately, it does not have to be performed unless and until a certain event occurs |
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What is recission? |
- Occurs when the parties agree to bring their contract to an end - For most executory contracts, both parties are giving up consideration (forgoing the right todemand what the previous contract set out) and this makes the recission enforceable |
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What is a contract that is executory or executed? |
- A contract is executory if a party has not fully performed its obligations - A contract is executed if a party has fully performed its obligations |
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What is accord and satisfaction? |
-Occurs when a party gives upright to demand performance in return for a new benefit - Accord: newagreement - Satisfaction: new consideration |
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What is release? |
- Discharge under seal - Used to discharge a contractwithout fresh considerationseal is substitute forconsideration |
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What is variation? |
- Smallchanges to existing contract - Contract retained but on new terms - Consideration required forenforcement |
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What is novation? Specifically was is two-party novation and three-party novation? |
- An old contract is discharged andreplaced with a new contract - Two-party novation: same parties,different contract - Three-party novation:different parties, same contract |
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What is a waiver? |
- Occurs when a party abandons a right to insist on contractual performance - Does not require a seal and does not need to take any specific form - Clear evidence is required to prove the party intended to waive its rights - A party can retract its own waiver if it gives reasonable notice of its intention to do so and if retractionis not unfair to the other party |
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What is discharge by operation of law and what are the three types?? |
- If a contract is discharged by operation of law - Frustration - Lapse of limitation period - Bankruptcy |
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What is frustration? |
- Contract impossible to perform |
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What is lapse of limitation period? |
- Statutes of limitation: require a party who has suffered a breach of contract to sue within a certainperiod - Generally, a lapse of limitation period does not discharge the contract, but rather prevents that personfrom starting legal proceedings |
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What is discharge through bankruptcy? |
- A bankrupt debtor is discharged from outstanding contractual obligations if the bankruptcy was causedby misfortune rather than by misconduct |
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What is a breach? |
- A breach occurs whenever a party does not perform precisely as promised |
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What are the three types of terms in breach of condition? |
- Condition - Warranty - Intermediate |
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When is a term a condition? |
- A term is a condition if the innocent party would be substantially deprived of the expected benefit of the contract if a breach occurred - The customer enjoys an option; they can continue with the contract and claim damages for the losses they suffered as a result of the breach - Or, they can choose to discharge the contract and claim damages for the losses they suffered as a result of the breacH |
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When is a term a warranty? |
- A term is a warranty if the innocent party would not be substantially deprived of the expected benefit of the contract if a breach occurred |
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When is a term intermediate? |
- A term is intermediate if, depending upon the circumstances, the innocent party may or may not be substantially deprived of the expected benefit of the contract in the event of breach |
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What determines whether a discharge occurs when a breach occures? |
- The type of term breached |
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What are the types of breach? |
- Defective performance - Deviation - Anticipatory breach - Self-induced impossibility |
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What is defective performance? |
- Occurs when a party fails to properly perform an obligation due under acontract - Exception is made only if the defect in performance is truly trivial |
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What is deviation? |
- Occurs when a ship, train or truck departs from the route agreed upon by the parties |
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What is anticipatory breach? |
- Occurs when a party indicates in advance, by words or conduct, that it does not intend to fulfill an obligation when it falls due under a contract - Innocent party is entitled to seek relief immediately if there is an anticipatory breach |
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What is a self-induced impossibility? |
- If the impossibility is caused by one of the parties, then that party will beheld liable for breach |
