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WGU-LWC1-Contracts

QuestionAnswer
Definition - Judicial Restraint court taking a passive role and requiring parties to fulfill obligations they agreed to.
Definition - Judicial Activism court will ignore certain contract provisions or entire agreement if judge believes enforcing the deal would be unjust. May be willing to artificially create a contract where none existed if judge believes that it is the only way to avoid injustice.
Four elements of a contract o Agreement. One party makes valid offer, other party accepts. o Consideration. Has to be bargaining that leads exchange between parties. o Legality. Contract must be for a lawful purpose. o Capacity. Parties must be adults of sound mind
Definition - Noncompetition Agreement – A contract in which one party agrees not To compete with another in a stated type of business
Definition - Bilateral Contract A binding agreement in which each party has made a promise to the other
Definition - Unilateral Contract A binding agreement in which one party has made an offer that the other can accept only by action, not words. (“I'll give you a hundred bucks if you mow my lawn this weekend.”).
Definition - Express Contract A binding agreement in which parties explicitly state all the important terms. Some are oral and some are written. Might be bilateral or unilateral. Oral contracts are fully enforceable.
Definition - Implied Contract binding agreement not by explicit language, but by informal words and conduct of the parties.
A contract is executory when... one or more parties has not fulfilled its obligations
A contract is executed when... all parties have fulfilled their obligations.
Definition - Valid contract A contract that satisfies all of the law's requirements
Definition - Unenforceable Agreement When the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it.
Definition - Voidable Contract When the law permits one party to terminate the agreement.
Definition - Void Agreement One that neither party can enforce, usually because the purpose of the deal is illegal or because one of the parties had no legal authority to make a contract.
Two remedies created by judicial activism 1) Promissory estoppels 2) Quasi-contract
Definition - Promissory estoppels Defendant made promise, plaintiff relied on. If no contract, plaintiff may use to enforce promise if can show: 1)Defendant made promise knowing plaintiff would rely on it, 2)plaintiff relied on promise, 3)only way to avoid injustice is enforce promise.
Definition - Quasi-contract The defendant did not make any promise, but did receive a benefit from the plaintiff.
Definition - Quantum meruit An equitable remedy which does not arise out of a contract, but is independent of it. party may recover under quantum meruit only when there is no express contract covering the services or materials furnished.
Two groupings of law that together cover all contracts UCC and the Common Law
What does the UCC govern? Uniform Commercial Code governs aspects of commerce including sale/leasing of goods, neg.instr., bank deposits, letters of credit, investment sec., secured transactions, other commercial matters. Goods=Anything movable except for $, sec, legal rights.
What does Common Law govern? Contracts for services, employment, real estate.
Definition - Condition Precedent Some event has to occur before the other party is obligated to execute there part of the contract.
Definition - Condition Subsequent A condition must occur after the particular contracted duty arises.
Definition - Concurrent Conditions Parties have a duty to perform their contractual obligations simultaneously.
What is the important difference between condition precedent and condition subsequent? Who needs to prove whether the condition occurred. . If a condition precedent, plaintiff has the burden to prove the condition happened (the defendant was obligated). A condition subsequent, the defendant must prove the condition occurred.
Definition - Strict Performance Measurement of contract execution that is normally not required, unless strict clauses are included in the contract, and are reasonable.
Definition - Substantial Performance In a contract for services, a party that substantially performs its obligations will receive the full contract price, minus the value of any defects.
Definition - • Personal Satisfaction Contract Contract where the promisee makes a personal, subjective evaluation of the promisor's performance.
Definition - Material breach One that substantially harms the innocent party and for which it would be hard to compensate without discharging the contract.
Definition - Anticipatory breach Making it unmistakably clear that one party will not honor the contract, either by announcment before execution of the contract, or by actions of the party indicating an upcoming breach of contract.
Definition - • True impossibility A breach of contract - something has happened making it utterly impossible to do what the promisor said he would do. The only 3 types are: Destruction of the Subject Matter, Death of the Promisor in a Personal Services Contract, Illegality.
Definition - A condition is an event that must occur before a party becomes obligated. It may be stated expressly or implied, and no formal language is necessary to create one.
Definition - Remedy The method a court uses to compensate an injured party.
Definition - Injunction A court order forcing someone to do something, or refrain from doing something
Definition - Expectation damages The money required to put one party in the position they would have been in had the other side performed the contract.
Definition - • Liquidated Damages clause A provision in the contract that declares in advance what one party will receive if the other side breaches.
Definition - Specific Performance Damages Used in cases of rare property. Forces both parties to complete the deal.
Definition - Interest (Contractual) A legal right in something
Definition - Expectation Interest Refers to what the injured party reasonably thought they would get from the contract. Most common remedy the law provides for a injury by breach of contract, designed to put injured party in position they would have been in if sides performed their duties
The 3 type of Expectation Damages 1)Compensatory (or “direct”) damages, 2)Consequential (or “special”) damages, 3)Incidental damages
Definiton - Compensatory Damages Damages awarded directly from the contract's breach; Most common expectation interest monetary award.Referred to as “direct damages.”
Definition - Consequential (special) Damages Represent harm caused by the injured party's unique situation (Hadley v. Baxendale, 1954). "the injured party may recover consequential damages only if the breaching party should have foreseen them when the two sides formed the contract".
Definition - 3) Incidental Damages Relatively minor costs that the injured party suffers when responding to the breach. Minor costs such as storing or returning defective goods, advertising for alternative goods, etc
The two remedies available to the seller of goods Resell the goods elsewhere &, if done in good faith, will be awarded the difference between original contract and the price obtained in the open market. 2) Settle for the difference between the contract price and the market value of the goods.
Definition - Reliance Interest Expended money in reliance on the agreement and that in fairness they should receive compensation. Designed to put injured party in position they would have been in had the parties never entered into a contract.
Definition - Restitution Interest Designed to return to the injured party a benefit that he has conferred on the other party, which it would be unjust to leave with that person. Court may choose restitution because no other remedy is available or because no other remedy would be as fair.
Definition - Rescission To “undo” a contract and put the parties where they were before they made the agreement.
Definition - Equitable Interest • In some cases, money damages will not suffice to help the injured party. Something more is needed, such as an order to transfer property to the injured party (specific performance) or an order forcing one party to stop doing something (an injunction).
Three Types of Equitable Interests Specific performance, Injunction, Reformation
Definition - Specific Performance Type of Equitable interest, the remedy of which orces the two parties to perform their contract, only in cases involving the sale of land or some other asset that is unique
four essential prerequisites necessary for injunctive relief 1-Likelihood of success on merits 2- Necessary to prevent immed. and irreparable harm that could not be compensated monetaril,3-More injury occurs from denying the injunction than from granting, 4)Restores parties to the status quo prior to the conduct.
Definition - Reformation Type of equitable interest, in which a court will partially “re-write” a contract contract if it believes a written agreement includes a simple mistake.
Definition - Mitigation of Damages A party injured by a breach of contract party is expected to keep damages as low as he reasonably can. party injured by a breach of contract may not recover for damages that he could have avoided with reasonable efforts.
Definition - Nominal Damages a token sum, such as one dollar, given to a plaintiff who demonstrates that the defendant breached the contract but cannot prove damages.
Definition - Liquidated Damages A provision stating in advance how much a party must pay if it breaches. Court will generally enforce if (1) at the time of creating the contract it was very difficult to estimate actual damages, and (2) the liquidated amount is reasonable.
Definition - Punitive Damages Court ordering a breaching party to pay extra money damages because its conduct was socially intolerable. Not designed to compensate the injured party but to punish the breaching party. Limited to the 9x the compensatory damages
Created by: Raidinator