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Chapter 17 BAFN

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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  


   






 
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Created by: ryan3743