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Legal Business 1 > Ch 9 > Flashcards

Ch 9 Flashcards

0
Q

Parol evidence rule

A

Parties to a complete and final written contract can’t
introduce oral evidence in court that changes intended
Meaning of written terms

Does not apply to oral modifications, just oral agreements
Prior to written contract

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1
Q

In interpretation of contract terms…

A

Handwriting is the best evidence of intention over typing

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2
Q

Duty of performance

A

Performance dictated in contract

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3
Q

Discharged

A

When party is relieved from responsibility of performance

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4
Q

Condition precedent

A

Something must take place in future before party has duty
to perform

Ex. Building Developer may contract to buy land when the city annexes it

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5
Q

Condition subsequent

A

Excuses contractual performance if some future event
Takes place

Ex. Marine insurance policy might terminate coverage for shipping losses if war is declared

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6
Q

Concurrent condition

A

Parties have simultaneous duties to perform

Ex. In contract for transfer of title of land, buyer and seller expect to meet at closing event and perform their obligations concurrently

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7
Q

Delivery

A

Legal term referring to transfer of possession from seller

To buyer

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8
Q

Terms of delivery for goods

A

Refer to terms of UCC

Seller is obligated to deliver goods

Buyer’s duty is accept and pay for them

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9
Q

Terms of delivery for services

A

Require more specificity and reasonableness in contract

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10
Q

Destination contract

A

Requires seller to get the goods shipped and delivered

To place of business designated by buyer

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11
Q

Tender performance

A

Offer to perform

Ex. When consultants offer to send a team to your plant
Next week they are tendering performance

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12
Q

3 levels of performance courts recognize

A

1 Complete performance

2 material breach

3 substantial performance

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13
Q

Complete performance

A

Recognizes that contracting party has fulfilled every duty
Required by contract

Ex. Payment of money is a contractual duty of performance that party can perform completely

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14
Q

Party that performs completely on contract is entitled to…

A

A complete performance by other party and may sue to

Enforce right

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15
Q

Material breach

A

Level of performance below what is reasonably acceptable

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16
Q

Party that has materially breached contract can’t…

2) And is liable for…

A

Can’t sue the other party for performance

2) damages arising from breach

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17
Q

Substantial performance

A

Represents less than complete work

Work done is sufficient to avoid claim of breach

Ex. Construction contractor who gets a home built but hasn’t finished the landscaping on time

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18
Q

A party who substantially performs may be entitled to…

A

Partial recovery under contract

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19
Q

Employment contracts can be divided into parts because…

A

Performs servicesover a period of Time followed by the wages

That are due, this is a recurring pattern

20
Q

4 most common ways to discharge party’s obligation under a contract

A

1 complete performance of contract
2 tendering performance if tender is rejected
3 substantial performance
4 performance of part of divisible contract

21
Q

3 common reasons for impossibility of performance

A

1 death of essential party

2 destruction of essential materials

3 subject matter of contract becomes illegal

22
Q

Commercial impracticability

A

Impractibility of performance depends on circumstances

Ex. Manufacturer may be discharged from obligation to make goods for buyer when manufactures major source of raw materials is unexpectedly interrupted

23
Q

Waiver

A

When party intentionally relinquishes right to enforce contract

Ex. Landlord may waive a late payment fee when rent is paid 2 days late

24
Q

When does a release exist?

A

When party announces the other party doesn’t have to
Perform as promised

It is bargained for in form of negotiated contract

25
Q

5 common remedies/solutions for breach of contract

A 
1 negotiated settlement
2 arbitration
3 various awards/damages
4 specific performance
5 rescission
26
Q

Liquidated damages

A

Parties specify in contract the amount damages should

Be

27
Q

Rescission

A

Requires each party to return consideration given to other

Often used in fraud and misrepresentation cases

28
Q

Mitigation

A

Purposeful reduction of damages

Usually responsibility of nonbreaching party

Ex. If tenant moves away before lease expires, land lord
Must mitigate damages by trying to rent the room
To willing and suitable tenant

29
Q

Mortgagee

2) mortgagor

A

Lender

2) borrower

30
Q

Agents

A

People who get the work done

31
Q

3 parties in agency relationships

A

1 principal

2 agent

3 3rd party

32
Q

Agency relationship: Principal

A

Interacts with someone/or organization for purpose of

Obtaining second party’s assistance

33
Q

Agency relationship: agents

A

Principal hires agents to do tasks and represent them in
Transactions

Ex. All employees are agents of employer/principal, but
Not all agents are employees

34
Q

Independent contractor

A

Employers don’t directly control independent contractor

Independent contractors generally work for more than 1
Principal

Ex. Attorneys, accountants

35
Q

Third party

A

Agent on behalf of principal interacts with 3rd party

36
Q

The legal purpose of an agent is to create…

A

Binding relationship btw principal and 3rd party

37
Q

To accomplish the good relationship between the principal and third party, what 4 duties must the agent accomplish?

A

1) loyalty to act in principals best interest
2 keep principal fully informed
3 obey instructions
4 account to principal for monies handled

38
Q

4 forms contractual authority can take to make principal and 3rd party contractually bound

A

1 actual authority
2 expressed, written authority
3 implied authority
4 apparent authority

39
Q

Actual authority

A

Specific instructions, spoken or written given by employer
To an employee to create actual authority

Ex. Written note or oral confirmation to charge money on account through obtaining goods from another business

40
Q

Implied authority

A

Inferred from Acts of an agent who holds position of
Authority or had actual authority in previous situations

Ex. Employee goes to grocery store and charges $60 for
Tuna fish to restaurant’s account, employer receives bill
From grocery store and is contractually bound to pay it

41
Q

Apparent authority

A

Notify 3rd parties if agent no longer works for you, this
Notice cuts off authority

Ex. If you fire employee from restaurant and you don’t let grocery store know about this. The fired worker goes to store and
Charges food to restaurants account in retaliation, your restaurant is liable for the charges to the store, but have claim against former employer for the charges

42
Q

Agency law: trading partnership

A

One engaged in business of buying and selling commodities
Has implied authority to borrow money in usual course of business

And pledge credit of firm

43
Q

Agency law: nontrading partnership

A

Accounting or other service firm Has no implied power

to borrow

44
Q

Ratification

A

Occurs when principal voluntarily decides to honor
agreement, which otherwise wouldn’t be binding due to
Agent’s lack of authority

Ex. Alex enters contract on behalf of restaurant to purchase
$100,000 of kitchen equipment. If Alex had no authority to bind restaurant, but you realize it’s a great deal, you could ratify the contract and follow through with the transaction

45
Q

Tort

A

Breach of duty that causes injury to person or their property

46
Q

Tort doctrine: respondeat superior

A

If employee is liable for tortious acts in scope of employment,
Employer is also liable

Most respondeat superior cases involve employee negligence

Ex. If employee strikes customer when arguing about a returned business delivery, employer is liable
If employee strikes customer when arguing over football, employer isn’t liable

47
Q

Frolic and detour

A

Employers defense against respondeat superior that
Employee was outside scope of employment

Ex. Employee was driving to see friend when accident occurred

Legal Business 1 (25 decks)

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