Chapter 11 Flashcards
Discharged by performance
I contract is discharged when a party is relieved of the need to fulfil any promises
Most likely by performance, which is when parties fulfil their obligations
Late penalty on performance
Generally courts allow parties to be late on performance, even if a specific deadline is indicated
Compensation can be awarded for damages suffered as result of delay
If time is important
A clause should state that time is of the essence
When is time of the essence?
Predetermined
- deadline expressed within contract
Subsequent notice
- can give reasonable notice that performance must occur by a certain deadline
Reasonable time
- even without contemplation of time parties must perform within reasonable time
Option to terminate
A term that allows one or both parties to subsequently terminate the agreement
Condition subsequent
Term that states agreement will be terminated if certain of end occurs
True condition precedent
Term that states in agreement will come into existence only if and when a certain event occurs
Condition precedent
Term that states an agreement exist, but performance does not have to occur until an event occurs
Rescission
Parties can agree to end their contract, even though a party has not fully performed It’s obligations.
Ex. Creative differences.
Executory
A contract that someone has not fully performed yet
Executed
Once obligations are performed, a contract is considered executed
Novation
Occurs when one contract is replaced with another
Release
Agreement under seal to terminate a contract
I’m letting you out of this contract, but you aren’t doing anything for me so the seal acts as their consideration
Three ways of contract can be ended by operation of law
Frustration
Lapse of limitation period
Bankruptcy
Lapse of time period
Parties must suit within two years of breach of contract
If the debit or acknowledges the debt, the acknowledgement restarts the two year clock
(acknowledgements include partial payments or written/verbal acknowledgements)
Breach of contractual term
Add contract can be brought to an end if one of its conditions is breached
Condition: Fundamental term of the contract, breaching would deprive a party of the benefit of the contract
Breach: a party does not perform precisely as promised
Not a term in a contract is a condition (not all fundamental)
These are called warranty’s
Frustration
Becomes impossible or radically changed, thus parties are of any obligation to perform outstanding obligations
Bankruptcy
A bankrupt debtor is generally discharged from outstanding contractual obligations
Types of contract breaches
Defective performance
Anticipatory breach
Self induced impossibility
Defective performance
A partial completion of obligation
Anticipatory breach
Indicates in advance that they will not perform
Self induced impossibility
When a party voluntarily or recklessly makes performance of a contract impossible
