5. Operation of a Contract

Question 1

What is the doctrine of privity of a contract?

Answer 1

Only the persons in the contract have the to acquire rights under it and incur liabilities under it

Question 2

Are there exceptions to the doctrine of privity?

Answer 2

There is the agent or third party rule. The agent or third party after the contract is made has no authority, rights or obligations in the contract.
Also the property law exception. Ruskin Rowe agreements how houses are built

Question 3

What are the two situations were there is a termination of contract by breach?

Answer 3

Where one party repudiates the whole contract by act or deed.
Where one party breaks a term of the contract.

Question 4

What is anticipatory breach of contract?

Answer 4

Where a contract is entirely unperformed and if one party repudiates the contract, the other can treat the contract as terminated and sue immediately for damages. Otherwise the innocent party can keep the contract ‘on foot’ until the date of performance then it will become an actual breach

Question 5

What is a breach in performance?

Answer 5

Usually involves not a complete repudiation but rather a breach of certain obligations under it. This entitles the other party to terminate the contract and sue for damages if it is a fundamental part

Question 6

Can there be mutual abandonment?

Answer 6

Yes. If both parties agree

Question 7

What is the difference between a condition and a warranty?

Answer 7

Condition is a term of the contract that is such a basic importance that breach of it gives rise to a right to terminate the contract.
A warranty is a subsidiary to the main purpose of the contract

Question 8

What is unconscionable conduct?

Answer 8

This is to protect the party with weak bargaining power. And the contract might be voidable under, special disadvantage or unconscientious advantage.