Termination, breach, damages

Question 1

What does P stand for in the termination of contract (BLIMP)?

Answer 1

Performance

Refers to the completion of the contractual obligations as agreed.

Question 2

What does M stand for in the termination of contract (BLIMP)?

Answer 2

Mutual rescission

Both parties agree to terminate the contract.

Question 3

What does I stand for in the termination of contract (BLIMP)?

Answer 3

Impossibility of performance

The contract cannot be fulfilled due to unforeseen circumstances.

Question 4

What does L stand for in the termination of contract (BLIMP)?

Answer 4

Lapse of time

The contract is terminated due to the expiration of the time period specified.

Question 5

What does B stand for in the termination of contract (BLIMP)?

Answer 5

Breach

Occurs when one party fails to perform a valid obligation.

Question 6

What is specific performance?

Answer 6

A remedy for breach where the court orders the other party to perform according to the terms of the contract

Specific performance is often used when monetary damages are insufficient.

Question 7

What are liquidated damages?

Answer 7

Amount of damages stipulated in the contract, typically the earnest money deposit

Liquidated damages are predetermined amounts agreed upon by the parties in the contract.

Question 8

What are compensatory damages?

Answer 8

Involves a lawsuit to recover the actual amount of monetary loss (unliquidated damages)

Compensatory damages are intended to make the injured party whole again.

Question 9

What is rescission?

Answer 9

The court orders the parties back to their original positions as though the contract never existed

Rescission effectively voids the contract and restores the parties to their pre-contract state.