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Chapter 17 BAFN

QuestionAnswer
A party may be discharged from a valid contract by... (4) 1) A condition occurring or not occurring. 2) Full performance or material breach by the other party. 3) Agreement of the parties. 4) Operation of law.
Define Rescind means that they terminate it by mutual agreement
Define Condition an event that must occur before a party becomes obligated under contract
Define Express Conditions No special language is necessary to create the condition, but it must be stated clearly somehow
Define Implied Conditions The condition is not stated, but is clear from the agreement
Define Condition Precedent A future, uncertain event creating a duty to perform EXAMPLE: Tisha contracts to buy a house on the condition she is able to obtain financing. The contract arises and she is obligated to purchase the house once she obtains financing
Define Condition Concurrent Bryan promises to buy Stevie’s guitar for $1000. Stevie must give Bryan the guitar when Bryan gives Stevie $1000.
Example of Condition Subsequent Lee agrees to work for Wool Co. until he returns to college. Lee returns to college in August and discharges his obligation under the contract.
A time of the essence clause will generally make contract dates strictly enforceable
Statue of Limitations Will limit the time within which the injured party may file suit
True or False: breach of contract gives the non-breaching party the right to sue and recover for damages caused by the breach True
Standard for determining materiality is flexible, but generally based on the amount of the breach and timing for performance
In an Anticipatory Breach, the promisee has these choices (3) 1) Withhold his/her own performance and sue for damages for total breach of contract immediately 2) Wait to sue until time for performance in case the other party changes his mind and decides to perform 3) Waive his/her rights to performance
Define Commercial Impracticability Some event has occurred that neither party anticipated, making the contract extra-ordinarily difficult and unfair to one party
Define Frustration of Purpose Some event has occurred that neither party anticipated and the contract now has no value for one party
Define Accord an agreement in which a promisee who has existing claim agrees with promisor that s/he will accept some performance different from that originally agreed on
Define Satisfaction When promisor performs the accord
Define Discharge of Alteration One party alters and other does not consent
Define Discharge by statute of limitations One party takes too long to bring lawsuit
True or False: When a condition precedent occurs, the contract arises, creating duties to perform True
True or False: John agrees to work as Katy’s realtor until he sells her house. Katy closed on her house sale yesterday, so the contract has been discharged True. This is an example of a condition subsequent.
True or False: The standard for materiality of a breach is when only 50% of a contract has been performed False. The standard for the materiality of a breach is flexible, but generally based on the amount of the breach and timing for performance
True or False: Legal remedies for breach of contract include specific performance or injunction False. Legal remedies for breach of contract include compensatory damages, nominal damages, liquidated (contractual) damages, and in certain circumstances, punitive damages
True or False: Nonperformance of a duty is always a breach of contract False. Nonperformance of a duty generally is a breach of contract, but there are valid reasons to excuse performance.
True or False: Performance that falls short of complete performance in some minor respect, but does not deprive the other party of a material part of the consideration for which s/he bargained is known as substantial performance True
Created by: ryan3743