CH 9 Flashcards
what are the four ways that a contract can be brought to an end
performance
agreement
Frustration
Breach
explain vicarious performance
Performance of contractual obligations through others.
Business creates the contract, but the person who actually does the work may not be privy to it.
they cannot be sued for it
once there is termination by agreement between both parties, what four things can they do
end the contract all together
vary certain terms of the contract
substitute a party- transfer legal rights and obligations to another party
Novation- enter a whole new contract
explain assignment of contract with example
The transfer of a right by an assignor to an assignee.
- A creditor (the assignor) may assign the right to collect to another person (the assignee) without the agreement of the debtor.
- To be effective, the debtor must have notice of the assignment so that she knows to pay the assignee rather than the creditor.
explain frustration
Termination of a contract by an unexpected event or change that makes contractual performance functionally impossible or illegal.
what four things are needed to show frustration for an event
- be unforeseen
- not arise do to fault of parties
- make the purpose of the contract impossible or very difficult
- not be a risk
explain Force majeure clasue
- deal with risks of unforeseen events, and allow parties to delay or terminate a contract
- Events might be floods, war, strike, currency devaluation, or rationing of raw materials.
what three things must a plaintiff show non performance of a contract to trigger a lawsuit
establish that there is a contract
show breach of contract
Entitlement to a remedy
what is condition
An important term that, if breached, gives the innocent party the right to terminate the contract and claim damages.
what is warranty
A minor term that, if breached, gives the innocent party the right to claim damages only.
what is an innominate term
A term that cannot easily be classified as either a condition or a warranty.
explain Anticipatory breach
A breach that occurs before the date for performance.
It is actionable, so the innocent party can sue immediately.
The innocent party is entitled to damages.
The innocent party is entitled to treat the contract as terminated
explain Expectation damages
Damages that provide the plaintiff with the monetary equivalent of contractual performance.
The most common measurement
The purpose of damages in contract law is generally to compensate a plaintiff.
explain Duty to Mitigate
All who suffer a breach of contract are obligated to take reasonable steps to minimize the losses resulting from a breach of contract or other wrong.
Reasonable costs associated with the mitigation are recoverable by the party in breach.
the difference between rights and duties in assignment
rights can be transferred, duties cannot be transferred without agreement.
Bob can transfer his right to collect cash but he cannot transfer his duty to finish the house he is contracted to finish
what is specific performance
courts makes the parties do exactly what there were intending to do in the contract instead of awarding compensation. usually in cases in sale of land
whats an injunction
court orders someone not to do something
whats an interlocutory injunction
requires someone to stop doing something until the whole dispute can be resolved through a trial.
an injunction for a certain amount of time
What is unjust enrichment?
Unjust enrichment occurs when one party has undeservedly or unjustly secured a benefit at the other party’s expense.
How can a plaintiff avoid the application of an exclusion of liability clause?
The plaintiff must establish, on the basis of Tercon, that the clause does not cover what happened, or that the clause should not be enforced for reasons going to unconscionability, or that the clause should be enforced for reasons going to public policy.
how does The court distinguishes between a condition and warranty
by determining the parties’ contractual intention. This includes an assessment of all the circumstances surrounding the contract, including the language chosen by the parties in the contract itself.
what is the privity rule
The privity rule states that, generally speaking, only those who are parties of a contract may enforce the rights and obligations under it.
what two things must be shown to claim non pecuniary damages from a contract
(1) that the object of the contract was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties;
(2) that the degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation.
explain statute consumer protection legislation and privity
lack of privity is no defence to an action brought under the act for breach of warranty brought against a manufacturer,
explain statute insurance legislation and privity
beneficiary under a life insurance contract to sue the insurer even though the beneficiary is not a party to the contract (i.e., even though the beneficiary lacks privity).
list 5 ways where a court cant order specific performance
improper behaviour by the plaintiff
delay. Failure by the plaintiff to bring a claim promptly can be grounds for denying the plaintiff an equitable remedy
impossibility
severe hardship. If specific performance would cause a severe hardship to the parties, or to a third party, a court may refuse to order it.
employment contracts. A court will not, ordinarily, order specific performance of an employment contract, because being forced to work for someone else against the employee’s wishes would interfere too much with the employee’s personal freedom.
What is the legal term for a remedy in which the court utilizes its jurisdiction to order an injunction for a stated period of time?
interlocutory injunction
what is the test for remoteness
the damages could have been anticipated, having “arisen naturally” from the breach, or
the damages—although perhaps difficult to anticipate in the ordinary case—are reasonably foreseeable because the unusual circumstances were communicated to the defendant at the time the contract was being formed.
Any claim for damages in contract must pass one of the remoteness tests set out above; otherwise, it is simply not recoverable
