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Ch. 7 Contracts
Business Law- Contract Performance: Conditions, Breach, and Remedies
| Question | Answer |
|---|---|
| Condition Precedent | Event must occur before performance under a contract is due |
| Condition Subsequent | Event occurs after the performance under the contract and discharges the parties obligations |
| Rescission | If neither party has fully performed, the parties may agree to cancel the contract |
| Accord and Satisfaction | Parties may agree to accept performance that is different from the original performance |
| Novation | Parties may agree to substitute a third party for one of the original parties to the contract |
| Impracticability | The burden of performance must be unforeseeable and be extreme in terms of cost burden |
| Frustration of Purpose | One party's purpose is completely or almost completely frustrated by such supervening events |
| Other Examples of Discharge by law | 1. Contract is unilaterally altered by a party 2. Contract is subject to relief of the bankruptcy code 3. expiration of the statute of limitation |
| Anticipatory Repudiation | After parties entered into agreement but before performance has occurred, it may become apparent that one party does not intend to perform. |
| Total Breach of Contract | One party fails to perform its duties |
| Partial Breach of Contract | Failure to perform that is not substantial enough to discharge the non-breaching party |
| Remedies | Usually rewarded in money damages |
| Compensatory Damages | Covers a broad spectrum of losses for recovery of actual damages. |
| Consequential Damages | Foreseeable indirect losses not covered by compensatory damages |
| Restitution | Designed to prevent unjust enrichment. If one party is in process of performing the contract, other party commits breach, non-breaching party is entitled to cancel the contract and receive fair market value for any services rendered. |
| Liquidated Damages | Agree at the time of the contract that a breach would result in a fixed damage amount |
| Specific Performance | Remedy where a court orders the breaching party to render the promised performance by ordering the party to take a specific action. |
| Injunctive Relief | Refrain from performing a particular act |
| Reformation | When the parties have imperfectly expressed their agreement and imperfection results in a dispute, court may change the contract by rewriting it to conform to the parties' actual intentions |
| Mitigation of Damages | So long as a party can avoid the damages with reasonable effort, they may be barred from recovery through a lawsuit |
| Rights of a Third Party | A party to an existing contract wishes to substitute another party in their place |
| Assignment | Transfer of current rights under a contract |
| Delegation | Transfer of current duties owed by one party under a contract to a third party |
| Third Party Beneficiaries | Benefits from a contractual promise between tow other parties may only seek damages if she is an intend beneficiary as opposed to an incidental beneficiary |
Created by:
ginganinjaem
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