02: Termination of contract. Flashcards
Severable contract.
A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.
A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.
Severable contract.
A severable contract is also known as a … contract.
divisible
T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be forfeited.
FALSE
T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be returned.
TRUE
T/F: in a totally frustrated contract in which neither party has incurred any losses the balance need not be paid.
TRUE
In a totally frustrated contract in which neither party has incurred any losses …
any deposit must be returned and any balance need not be paid.
T/F: Anticipatory breach may be inferred from conduct.
TRUE
T/F: Anticipatory breach must be explicit.
FALSE
It can be inferred from conduct.
A victim of a breach of condition …
may treat the contract as discharged and sue for damages.
Damage not ‘too remote’ must be that …
arising naturally from a breach
OR
in the reasonable contemplation of both parties
T/F: damages for breach of contract are primarily intended to restore the injured party to the same position they were in at the time when the contract was made.
FALSE
Damages are intended to put the party in the position they would have been had the contract been performed.
Damages are intended …
to put the party in the position they would have been had the contract been performed.
T/F: A claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract.
FALSE
A claimant is required to take only reasonable steps, not ones that carry undue risk or are discreditable.
In assessing the amount of damages, it is assumed that a claimant will take …
all reasonable steps to mitigate their loss.
A liquidated damages clause will not be enforced by the court if …
it is considered penal in nature.
i.e. out of all proportion to any legitimate interest of the injured party.
A vendor suffering breach of contract by a buyer in respect of a unique item, for example a rare sports car, who subsequently sells the car to an alternative buyer at a higher price …
will be able to claim only nominal damages since no loss has been suffered.
A vendor suffering breach of contract by a buyer in respect of an everyday item, for example a car in plentiful supply, who subsequently sells the car to an alternative buyer at a higher price …
may still claim for damages in respect of lost profits from the original buyer.
A liquidated damages clause is only valid if …
it is not penal in nature and protects the legitimate interest of the injured party.
T/F: Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy.
TRUE
T/F: Specific performance is likely to be more appropriate than damages in a contract involving personal services.
FALSE
equity rarely acts in personam. There is also the issue of supervision.