Ch 9 Flashcards Preview

Legal Business 1 > Ch 9 > Flashcards

Flashcards in Ch 9 Deck (48)
0

In interpretation of contract terms...

Handwriting is the best evidence of intention over typing

1

Parol evidence rule

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

2

Duty of performance

Performance dictated in contract

3

Discharged

When party is relieved from responsibility of performance

4

Condition precedent

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

5

Condition subsequent

Excuses contractual performance if some future event
Takes place

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

6

Concurrent condition

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

7

Delivery

Legal term referring to transfer of possession from seller
To buyer

8

Terms of delivery for goods

Refer to terms of UCC

Seller is obligated to deliver goods

Buyer's duty is accept and pay for them

9

Terms of delivery for services

Require more specificity and reasonableness in contract

10

Destination contract

Requires seller to get the goods shipped and delivered
To place of business designated by buyer

11

Tender performance

Offer to perform

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

12

3 levels of performance courts recognize

1 Complete performance

2 material breach

3 substantial performance

13

Complete performance

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

14

Party that performs completely on contract is entitled to...

A complete performance by other party and may sue to
Enforce right

15

Material breach

Level of performance below what is reasonably acceptable

16

Party that has materially breached contract can't...

2) And is liable for...

Can't sue the other party for performance

2) damages arising from breach

17

Substantial performance

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

18

A party who substantially performs may be entitled to...

Partial recovery under contract

19

Employment contracts can be divided into parts because...

Performs servicesover a period of Time followed by the wages
That are due, this is a recurring pattern

20

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

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

21

3 common reasons for impossibility of performance

1 death of essential party

2 destruction of essential materials

3 subject matter of contract becomes illegal

22

Commercial impracticability

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

23

Waiver

When party intentionally relinquishes right to enforce contract

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

24

When does a release exist?

When party announces the other party doesn't have to
Perform as promised

It is bargained for in form of negotiated contract

25

5 common remedies/solutions for breach of contract

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

26

Liquidated damages

Parties specify in contract the amount damages should
Be

27

Rescission

Requires each party to return consideration given to other

Often used in fraud and misrepresentation cases

28

Mitigation

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

29

Mortgagee

2) mortgagor

Lender

2) borrower

30

Agents

People who get the work done

31

3 parties in agency relationships

1 principal

2 agent

3 3rd party

32

Agency relationship: Principal

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

33

Agency relationship: agents

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

34

Independent contractor

Employers don't directly control independent contractor

Independent contractors generally work for more than 1
Principal

Ex. Attorneys, accountants

35

Third party

Agent on behalf of principal interacts with 3rd party

36

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

Binding relationship btw principal and 3rd party

37

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

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

38

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

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

39

Actual authority

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

40

Implied authority

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

41

Apparent authority

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

42

Agency law: trading partnership

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

43

Agency law: nontrading partnership

Accounting or other service firm Has no implied power
to borrow

44

Ratification

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

45

Tort

Breach of duty that causes injury to person or their property

46

Tort doctrine: respondeat superior

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

47

Frolic and detour

Employers defense against respondeat superior that
Employee was outside scope of employment

Ex. Employee was driving to see friend when accident occurred