Ch 9

Question 0

Parol evidence rule

Answer 0

Parties to a complete and final written contract can’t
introduce oral evidence in court that changes intended
Meaning of written terms

Does not apply to oral modifications, just oral agreements
Prior to written contract

Question 1

In interpretation of contract terms…

Answer 1

Handwriting is the best evidence of intention over typing

Question 2

Duty of performance

Answer 2

Performance dictated in contract

Question 3

Discharged

Answer 3

When party is relieved from responsibility of performance

Question 4

Condition precedent

Answer 4

Something must take place in future before party has duty
to perform

Ex. Building Developer may contract to buy land when the city annexes it

Question 5

Condition subsequent

Answer 5

Excuses contractual performance if some future event
Takes place

Ex. Marine insurance policy might terminate coverage for shipping losses if war is declared

Question 6

Concurrent condition

Answer 6

Parties have simultaneous duties to perform

Ex. In contract for transfer of title of land, buyer and seller expect to meet at closing event and perform their obligations concurrently

Question 7

Delivery

Answer 7

Legal term referring to transfer of possession from seller

To buyer

Question 8

Terms of delivery for goods

Answer 8

Refer to terms of UCC

Seller is obligated to deliver goods

Buyer’s duty is accept and pay for them

Question 9

Terms of delivery for services

Answer 9

Require more specificity and reasonableness in contract

Question 10

Destination contract

Answer 10

Requires seller to get the goods shipped and delivered

To place of business designated by buyer

Question 11

Tender performance

Answer 11

Offer to perform

Ex. When consultants offer to send a team to your plant
Next week they are tendering performance

Question 12

3 levels of performance courts recognize

Answer 12

1 Complete performance

2 material breach

3 substantial performance

Question 13

Complete performance

Answer 13

Recognizes that contracting party has fulfilled every duty
Required by contract

Ex. Payment of money is a contractual duty of performance that party can perform completely

Question 14

Party that performs completely on contract is entitled to…

Answer 14

A complete performance by other party and may sue to

Enforce right

Question 15

Material breach

Answer 15

Level of performance below what is reasonably acceptable

Question 16

Party that has materially breached contract can’t…

2) And is liable for…

Answer 16

Can’t sue the other party for performance

2) damages arising from breach

Question 17

Substantial performance

Answer 17

Represents less than complete work

Work done is sufficient to avoid claim of breach

Ex. Construction contractor who gets a home built but hasn’t finished the landscaping on time

Question 18

A party who substantially performs may be entitled to…

Answer 18

Partial recovery under contract

Question 19

Employment contracts can be divided into parts because…

Answer 19

Performs servicesover a period of Time followed by the wages

That are due, this is a recurring pattern

Question 20

4 most common ways to discharge party’s obligation under a contract

Answer 20

1 complete performance of contract
2 tendering performance if tender is rejected
3 substantial performance
4 performance of part of divisible contract

Question 21

3 common reasons for impossibility of performance

Answer 21

1 death of essential party

2 destruction of essential materials

3 subject matter of contract becomes illegal

Question 22

Commercial impracticability

Answer 22

Impractibility of performance depends on circumstances

Ex. Manufacturer may be discharged from obligation to make goods for buyer when manufactures major source of raw materials is unexpectedly interrupted

Question 23

Waiver

Answer 23

When party intentionally relinquishes right to enforce contract

Ex. Landlord may waive a late payment fee when rent is paid 2 days late

Question 24

When does a release exist?

Answer 24

When party announces the other party doesn't have to Perform as promised It is bargained for in form of negotiated contract

Question 25

5 common remedies/solutions for breach of contract

Answer 25

``` 1 negotiated settlement 2 arbitration 3 various awards/damages 4 specific performance 5 rescission ```

Question 26

Liquidated damages

Answer 26

Parties specify in contract the amount damages should | Be

Question 27

Rescission

Answer 27

Requires each party to return consideration given to other Often used in fraud and misrepresentation cases

Question 28

Mitigation

Answer 28

Purposeful reduction of damages Usually responsibility of nonbreaching party Ex. If tenant moves away before lease expires, land lord Must mitigate damages by trying to rent the room To willing and suitable tenant

Question 29

Mortgagee 2) mortgagor

Answer 29

Lender 2) borrower

Question 30

Agents

Answer 30

People who get the work done

Question 31

3 parties in agency relationships

Answer 31

1 principal 2 agent 3 3rd party

Question 32

Agency relationship: Principal

Answer 32

Interacts with someone/or organization for purpose of | Obtaining second party's assistance

Question 33

Agency relationship: agents

Answer 33

Principal hires agents to do tasks and represent them in Transactions Ex. All employees are agents of employer/principal, but Not all agents are employees

Question 34

Independent contractor

Answer 34

Employers don't directly control independent contractor Independent contractors generally work for more than 1 Principal Ex. Attorneys, accountants

Question 35

Third party

Answer 35

Agent on behalf of principal interacts with 3rd party

Question 36

The legal purpose of an agent is to create...

Answer 36

Binding relationship btw principal and 3rd party

Question 37

To accomplish the good relationship between the principal and third party, what 4 duties must the agent accomplish?

Answer 37

1) loyalty to act in principals best interest 2 keep principal fully informed 3 obey instructions 4 account to principal for monies handled

Question 38

4 forms contractual authority can take to make principal and 3rd party contractually bound

Answer 38

1 actual authority 2 expressed, written authority 3 implied authority 4 apparent authority

Question 39

Actual authority

Answer 39

Specific instructions, spoken or written given by employer To an employee to create actual authority Ex. Written note or oral confirmation to charge money on account through obtaining goods from another business

Question 40

Implied authority

Answer 40

Inferred from Acts of an agent who holds position of Authority or had actual authority in previous situations Ex. Employee goes to grocery store and charges $60 for Tuna fish to restaurant's account, employer receives bill From grocery store and is contractually bound to pay it

Question 41

Apparent authority

Answer 41

Notify 3rd parties if agent no longer works for you, this Notice cuts off authority Ex. If you fire employee from restaurant and you don't let grocery store know about this. The fired worker goes to store and Charges food to restaurants account in retaliation, your restaurant is liable for the charges to the store, but have claim against former employer for the charges

Question 42

Agency law: trading partnership

Answer 42

One engaged in business of buying and selling commodities Has implied authority to borrow money in usual course of business And pledge credit of firm

Question 43

Agency law: nontrading partnership

Answer 43

Accounting or other service firm Has no implied power | to borrow

Question 44

Ratification

Answer 44

Occurs when principal voluntarily decides to honor agreement, which otherwise wouldn't be binding due to Agent's lack of authority Ex. Alex enters contract on behalf of restaurant to purchase $100,000 of kitchen equipment. If Alex had no authority to bind restaurant, but you realize it's a great deal, you could ratify the contract and follow through with the transaction

Question 45

Tort

Answer 45

Breach of duty that causes injury to person or their property

Question 46

Tort doctrine: respondeat superior

Answer 46

If employee is liable for tortious acts in scope of employment, Employer is also liable Most respondeat superior cases involve employee negligence Ex. If employee strikes customer when arguing about a returned business delivery, employer is liable If employee strikes customer when arguing over football, employer isn't liable

Question 47

Frolic and detour

Answer 47

Employers defense against respondeat superior that Employee was outside scope of employment Ex. Employee was driving to see friend when accident occurred