Ch. 4.8-4.12 Contracts Flashcards Preview

CLEP - Intro to Business Law > Ch. 4.8-4.12 Contracts > Flashcards

Flashcards in Ch. 4.8-4.12 Contracts Deck (56)
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1

The overarching purpose of rules of ____________ is to determine the parties' intent. Courts will refer to the following factors, in order of importance:
a. Express words and conduct of the party
b. Course of ___________ - how the partied conducted themselves in the course of performing the contract
c. Course of _______ - how the parties conducted themselves during prior transactions with one another
d. Trade _____ - how words are used customarily or in the market applicable to the parties

interpretation; performance; dealing; usage

2

Courts will also use a variety of Rules of ____________ when trying to determine how a contract should be construed.

Construction

3

In addition to interpretation and construction rules, courts will imply certain terms in order to clarify a contract's meaning - these implied terms are called ___ ________. Courts impose an implied ____________ of good faith and when a contract does not indicate a level of performance, courts will imply and obligation to use ___________ efforts.

gap fillers.obligation; reasonable

4

The _____ __________ Rule is a rule regarding the kinds of evidence admissible when a party seeks to offer evidence designed to explain an agreement that is in writing. It's designed to exclude written or oral evidence of commitments made _____ to the actual written agreement b/c it tends to be unreliable.

Parol Evidence; prior

5

A __________ is an event that is not certain to occur. In a contract, it's when parties agree that performance is contingent on the occurrence of that uncertain event. There are 3 forms of conditions:
a. condition __________ - a condition that must occur before a duty to perform arises.
b. a condition _____________ - a condition that occurs at the same time as performance
c. condition ___________ - a condition that cuts off a pre-existing duty.

condition; precedent; concurrent; subsequent

6

When a _________ is excused, a party has an immediate obligation to perform. An excuse can occur by:
a. ___________ - when a party prevents a condition from occurring or fails to cooperate in order to ensure the occurrence of a condition.
b. _______ breach - the breaching party's obligation is absolute.
c. _____________ repudiation - will excuse a condition such that the repudiating party's duty to perform becomes absolute.
d. substantial ___________ of a condition will excuse the lack of complete performance of the condition.
e. if the party for who the condition was designed to benefit agrees to a ________

condition; hindrance; material; anticipatory; performance; waiver

7

When a promisor is under an absolute duty to perform (all conditions have been met or excused), the promisor's failure to perform represents a ______.

breach

8

A breach is considered _______ or trivial if the promisor substantially performs under the contract.

partial

9

A breach is considered _________ when it is so central to the contract that is significantly impairs the contract's value to the promisee.

material

10

It's a _____ breach if:
a. there is likelihood of cure
b. further delay will prevent the promisee from making _________ arrangements
c. prompt performance is critical element to the contract.

total; alternative

11

True/False: All total breachers are material breaches.

True

12

A _____ breach discharges the promisee's obligation, allowing them to withhold performance, terminate the contract, and bring suit to recover damages related to the full value of the contract. They are also allowed to seek alternative arrangement s for the fulfillment of the contact.

total

13

If a party unlawfully indicates they they will not perform when performance is due, then they have committed an ____________ __________ of the contract.

anticipatory repudiation

14

A party can ______ their repudiation by indicating a willingness to perform under the contract. A retraction is not valid if the non-repudiating party has:
a. materially changed her position in reliance on the repudiation or
b. indicated her willingness to treat the repudiation as a _____ breach.

retract; total

15

A party may ________ assurance when they have reasonable grounds for insecurity regarding another party's performance. It is a ________ request for reasonable assurances for a party's intention to perform.

demand; written

16

____________ damages are designed to approximate the amount necessary to compensate the part if the breach had not occurred and the contract had been fully performed. These are sometimes called the benefit of the _________.

expectation; bargain

17

expectation damages are comprised of _______ damages plus ______________ damages, and are then reduced by any costs or loss avoided.

direct; consequential

18

______ damages constitute the difference b/w the value of the performance a party should have received and the value of the performance the party actually received.

direct

19

_________ damages represent losses that result from other transactions that are dependent upon the breached contract.

consequential

20

A party's _________ damages are calculated as follows:
Direct Damages + Consequential Damages - Costs Avoided - Loss Avoided (mitigated)

expectation

21

_____________ in value refers to the difference b/w the value of the property as substantially complete and the value of the property upon full performance.

Diminution

22

If expectation damages are too speculative, they can be awarded ________ damages. These represent the amount of money a party has spent in justifiable reliance on the contract.

reliance

23

__________ reflects the amount of benefit one party conferred on the other, ex. the amount of damages reflecting unjust enrichment. It is not limited to the contract price and unlike reliance damages, it does not get reduced by the amount of money a party would have lost on a contract.

restitution

24

__________ and ___________ refer to the parties' ability to terminate the contract and then seek damages for unjust enrichment.

rescission and restitution

25

_________ __________ reflects an order from the court to perform the contract pursuant to its terms.

Specific performance

26

________ __________ is awarded when:
a. the damage remedy is inadequate and
b. the equitable need for such performance outweighs the burden of supervision and harm to the defendant.

Specific performance

27

Courts can also issue an _________, which represents an order prohibiting a party from engaging in certain conduct. This can be issues when:
a. the damage remedy is inadequate and
b. it is necessary to prevent irreparable harm to the non-breaching party.

injunction

28

Under some contracts, parties will stipulate the amount of damages to be awarded upon a breach. Courts will only use this amount if:
a. damages were difficult to determine or estimate at the time the contract was formed AND
b. the stipulated amount represents a reasonable forecast of the amount necessary to compensate a non-breaching party.
If these are met, the stipulated amount will be upheld and enforced as a valid ___________ damage clause.
If they are unreasonable, the stipulated amount will be construed as a ________ and not enforced.

liquidated; penalty

29

Non-recoverable damages include:
1.
2.
3.

1. punitive damages
2. non-economic damages
3. attorney fees

30

______ represents an improper threat that leaves the victim no reasonable alternative but to comply with an agreement. In this case, the contract is ________.

duress; voidable