Chapter 11 - Conclusion to Contracts

Question 1

What is a Third Party Beneficiary?

Answer 1

Someone who is not a party to the contract but stands to benefit from it.

Question 2

What is a Promisor?

Answer 2

The person who makes the promise that the third party beneficiary benefits from.

Question 3

What is a Promisee?

Answer 3

The person to whom a promise was made.

Question 4

When is someone an Intended Beneficiary?

Answer 4

If the parties intended her to benefit
and if EITHER
a. enforcing the promise will satisfy a duty of the promisee to the beneficiary
OR
b. The promisee intended to make a gift to the beneficiary

Question 5

What is a Creditor Beneficiary

Answer 5

A third party beneficiary to whom the promisee is fulfilling some duty

Question 6

What is a Donee Beneficiary?

Answer 6

A third party beneficiary to whom the promisee is making a gift.

Question 7

What is an Incidental Beneficiary?

Answer 7

A third party beneficiary that fails to qualify as a creditor or donee beneficiary

Question 8

What is an Assignor?

Answer 8

The person making an assignment

Question 9

What is an Assignee?

Answer 9

The person receiving an assignment

Question 10

What is an Obligor?

Answer 10

The person obligated to do something under a contract

Question 11

You _______duties and _______rights?

Answer 11

Delegate, Assign

Question 12

Any contractual rights may be assigned unless the assignment…? 3

Answer 12

• Would substantially change the obligor’s rights or duties under the contract
• Is forbidden by law or public policy
• Is validly precluded by the contract itself

Question 13

When is another situation when assignment is not permitted?

Answer 13

When the obligor is agreeing to perform personal service.

Question 14

When must an assignment be in writing?

Answer 14

When someone wants to assign rights governed by the Statute of Frauds

Question 15

When can an assignee enforce her contractual rights against the obligor?

Answer 15

Once the assignment is made the obligor is notified.

Question 16

Can an obligor legally affect an assignee?

Answer 16

The obligor may generally raise all defenses that she could have raised against the assignor.

Question 17

What is Delegation of Duties?

Answer 17

A contracting party transfers her duties pursuant to a contract to someone else

Question 18

What is a Delegator?

Answer 18

A person who gives his obligation under a contract to someone else.

Question 19

What is a Delegatee?

Answer 19

A person who receives an obligation under a contract from someone else

Question 20

Does delegating a duty relieve you legally of a duty?

Answer 20

No

Question 21

What is an Assignment of Rights?

Answer 21

A contracting party transfers his rights under a contract to someone else

Question 22

What is an Obligee?

Answer 22

The person how has an obligation coming to her

Question 23

An obligor may deligate his duties unless….?3

Answer 23

-Delegation would violate public policy
-The contract prohibits delegation
or
-The obligee had a substantial interest in personal performance by the obligor

Question 24

What is Rescind?

Answer 24

To terminate a contract by mutual agreement

Question 25

When is a party rendered to require strict performance?

Answer 25

When the contract expressly demands it and such a demand is reasonable

Question 26

What is Strict Performance

Answer 26

Performing a task exactly correct/complete

Question 27

What is Substantial Performance

Answer 27

Performing a task most of the way to complete/approved

Question 28

In a contract for services what does a party that performs substantial performance receive?

Answer 28

The full contract price, minus the value of any defects

Question 29

What will a party receive that does not substantially perform all of its obligations?

Answer 29

The value of the work performed, if any

Question 30

What four issues does the court look at to determine substantial performance?

Answer 30

- How much benefit the promisee received - If it is a construction contract, can the owner use the thing for its intended purpose - Can the promisee be compensated with money damages for any defects - Did the promisor act in good faith

Question 31

What is the Statute of Limitations?

Answer 31

Limits the time within which an injured party may file suit

Question 32

What is a Material Breach?

Answer 32

A breach that substantially harms the innocent party.

Question 33

When will a court not discharge an agreement due to impossibility?

Answer 33

If honoring the deal merely imposed a financial burden

Question 34

What is Interest?

Answer 34

A legal right in something

Question 35

What are the three causes that generally cause true impossibility?

Answer 35

- Destruction of the subject matter - Death of the promisor in a personal services contract - Illegality

Question 36

What are the four principal contract interests a court seeks to protect?

Answer 36

Expectation Interest Reliance Interest Restitution Interest Equitable Interest

Question 37

What is an Expectation Interest designed to do?

Answer 37

Put the injured party in the position she would have been in had both sides fully performed their obligations.

Question 38

What is the Landmark case that deals with Expectation Interest?

Answer 38

Hawkins v. McGee - Hairy Hand

Question 39

What are the typical three parts expectation damages are made up of?

Answer 39

Compensatory Damages Consequential Damages Incidental Damages

Question 40

What are Compensatory Damages

Answer 40

Are those that flow directly from the contract

Question 41

What are Consequential Damages?

Answer 41

Those that result from the unique circumstances of the plaintiff. Also known as Special Damages.

Question 42

What are Incidental Damages?

Answer 42

Are the relatively minor costs that the injured party suffers when responding to the breach.

Question 43

What is the golden rule in contract cases?

Answer 43

To give successful plaintiffs "the benefit of the bargain", and not to punish defendants.

Question 44

What are Direct Damages?

Answer 44

Those that flow directly from the contract. They are the most common monetary award for the expectation interest.

Question 45

When are consequential damages available?

Answer 45

If they are a foreseeable consequence of the breach.

Question 46

What is Novation?

Answer 46

If there is an existing contract between A and B, a novation occurs when A agrees to release B from all liability on the contract in return for C's willingness to accept B's liability

Question 47

What case does the rule regarding Consequential damages come from?

Answer 47

Hadley v. Baxendale.

Question 48

To win expectation damages, the injured party myst prove the breach of contract caused damages that can be ______?

Answer 48

Quantified with reasonable certainty

Question 49

What is a Reliance Interest designed to do?

Answer 49

To put the injured party in the position he would have been had the parties never entered into a contract

Question 50

What is Rescission?

Answer 50

The undoing of a contract, which puts both parties in the position they were in when they made the agreement

Question 51

What is Specific Performance?

Answer 51

Compels the parties to perform the contract they agreed to when the contract concerns the sale of land or some other unique asset

Question 52

What is an Injunction?

Answer 52

A court order to do something or refrain from doing something

Question 53

What is Mitigate?

Answer 53

To keep damages as low as possible