Contract Law - 3

Question 1

What are the 4 conditions where a contract can be discharged/ended?

Answer 1

1) Performance
2) Agreement between parties to end it/modify it
3) Breach by one or another party
4) Frustration

Question 2

Performance (discharging a contract)

Answer 2

Both parties satisfactorily complete their obligations under the contract (I agree to buy noodles from you for 15$. I pay you and you give me the noodles. Contract ended)

Question 3

Conditions (performance)

Answer 3

A major term of a contract that one or both parties must comply. Breach of this gives the right to terminate a contract and claim damages for losses up to termination + beyond

Question 4

Warranties (performance)

Answer 4

Minor term, non-essential branch which yields no right to termination. Claimant can only claim damages for losses up to the time of the action. Ex. House purchase fridge fiasco.

Question 5

Frustration of a contract

Answer 5

Where a contract becomes impossible to perform through no fault of either party
Ex. Sell house but it gets destroyed in an earthquake.
Ex. NK sanctioned by US. If have contract w someone in NK, contract is frustrated & neither parties are responsible

Question 6

What are 5 remedies to a breach of contract?

Answer 6

1) Rescission
2) Rectiication
3) Damages $$
4) Specific performance
5) Injunction

Question 7

Rescission

Answer 7

A cancelation of a contract, purpose is to put the parties in the position they would have been had the contract never been made

Question 8

What’s the difference between rescission and damages? (1) = rescission, (2) = damages

Answer 8

Lynn buys a refrigerator from Andy for $100. The freezer section is broken. Lynn is asking for (1) to return the refrigerator and get her $100 back. Andy offers to refund 1/2 he purchase price to compensate her for the non-functioning freezer. Andy is offering (2), putting the parties in the position they would have been in if the contractual obligations have been performed.

Question 9

Rectification

Answer 9

Available to alter the terms of a written agreement where a mistake has been made in the document. (Ex. Clerical errors, extra 0s)

Question 10

Liquidated damages clause

Answer 10

A term in the contract that attempts to reasonable estimate the damages that will be suffered in the case of a breach of contract.

Question 11

Damages

Answer 11

Sum of money to compensate the injured parties. Intended to put the inured party in the position he would have been had the **contract been fully performed. **

Question 12

Failing to mitigate a loss may result in a court not awarding compensation for the full loss suffered

Answer 12

Can I get compensation if I fail to mitigate a loss? I don’t make any effort to minimize/reduce the damages I will suffer as a result of another’s breach of contract.

Question 13

Specific performance

Answer 13

Court orders defaulting party to live up to the terms/promises of the contract. Ex. Purchasing Taylor Swifts glove, subject matter of the contract is unique, one-of-a-kind

Question 14

Injunction

Answer 14

Court ordered fine = a judicial order that restrains a person from doing specific acts. Ex. Cease and desist