Chapter 9 Flashcards
Ending a Contract
Principal methods of discharging a contract
- Performance
- Breach
- Agreement between the parties
- Frustration
Performance
Contractual obligations are discharged when each party
satisfactorily completes its part of the bargain
Substantial performance
condition is breached in some minor way and subject to a claim for the loss caused by the shortfall
Tender of performance
An offer or attempt to do what is required under a
contract
* One party is ready, willing, and able and attempts to perform but
performance is refused by other party
Breach
Failure of a breaching party to properly perform its
contractual obligations
Two ways to breach:
1. Improper or incomplete performance; or
2. Refusal to perform
Conditions
terms essential to substantial performance
- Where breached, victim relieved of obligations
Warranties
minor terms of contract
- Where breached, performance still required
Exemption Clauses
Attempt to significantly limit or eliminate liability
Fundamental Breach
A breach of a fundamental aspect of the contract that is not covered
by an exclusion clause
Discharge by Agreement
Contracts can be modified or ended by agreement
- Bilateral or unilateral discharge
Bilateral Discharge
agreement by both sides to terminate the contract or to
disregard a term of the contract – both parties are relieved of
obligations and therefore there is consideration.
Unilateral Discharge
One party performs and allows the other to be relieved
of all or some obligations – may not be adequate
consideration and the contract may be enforceable.
Conditions precedent
contract is binding only if a pre-existing condition is met
Conditions subsequent
The contract ends when some event or condition takes place
A force majeure clause
spells out who bears the risk if certain events occur
- Consequences for catastrophic events