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Legal & Regulatory Aspects of FP > Chapter 11 - Conclusion to Contracts > Flashcards

Chapter 11 - Conclusion to Contracts Flashcards

1
Q

What is a Third Party Beneficiary?

A

Someone who is not a party to the contract but stands to benefit from it.

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2
Q

What is a Promisor?

A

The person who makes the promise that the third party beneficiary benefits from.

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3
Q

What is a Promisee?

A

The person to whom a promise was made.

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4
Q

When is someone an Intended Beneficiary?

A

If the parties intended her to benefit
and if EITHER
a. enforcing the promise will satisfy a duty of the promisee to the beneficiary
OR
b. The promisee intended to make a gift to the beneficiary

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5
Q

What is a Creditor Beneficiary

A

A third party beneficiary to whom the promisee is fulfilling some duty

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6
Q

What is a Donee Beneficiary?

A

A third party beneficiary to whom the promisee is making a gift.

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7
Q

What is an Incidental Beneficiary?

A

A third party beneficiary that fails to qualify as a creditor or donee beneficiary

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8
Q

What is an Assignor?

A

The person making an assignment

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9
Q

What is an Assignee?

A

The person receiving an assignment

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10
Q

What is an Obligor?

A

The person obligated to do something under a contract

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11
Q

You _______duties and _______rights?

A

Delegate, Assign

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12
Q

Any contractual rights may be assigned unless the assignment…? 3

A
  • Would substantially change the obligor’s rights or duties under the contract
  • Is forbidden by law or public policy
  • Is validly precluded by the contract itself
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13
Q

When is another situation when assignment is not permitted?

A

When the obligor is agreeing to perform personal service.

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14
Q

When must an assignment be in writing?

A

When someone wants to assign rights governed by the Statute of Frauds

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15
Q

When can an assignee enforce her contractual rights against the obligor?

A

Once the assignment is made the obligor is notified.

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16
Q

Can an obligor legally affect an assignee?

A

The obligor may generally raise all defenses that she could have raised against the assignor.

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17
Q

What is Delegation of Duties?

A

A contracting party transfers her duties pursuant to a contract to someone else

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18
Q

What is a Delegator?

A

A person who gives his obligation under a contract to someone else.

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19
Q

What is a Delegatee?

A

A person who receives an obligation under a contract from someone else

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20
Q

Does delegating a duty relieve you legally of a duty?

A

No

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21
Q

What is an Assignment of Rights?

A

A contracting party transfers his rights under a contract to someone else

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22
Q

What is an Obligee?

A

The person how has an obligation coming to her

23
Q

An obligor may deligate his duties unless….?3

A

-Delegation would violate public policy
-The contract prohibits delegation
or
-The obligee had a substantial interest in personal performance by the obligor

24
Q

What is Rescind?

A

To terminate a contract by mutual agreement

25
Q

When is a party rendered to require strict performance?

A

When the contract expressly demands it and such a demand is reasonable

26
Q

What is Strict Performance

A

Performing a task exactly correct/complete

27
Q

What is Substantial Performance

A

Performing a task most of the way to complete/approved

28
Q

In a contract for services what does a party that performs substantial performance receive?

A

The full contract price, minus the value of any defects

29
Q

What will a party receive that does not substantially perform all of its obligations?

A

The value of the work performed, if any

30
Q

What four issues does the court look at to determine substantial performance?

A
  • How much benefit the promisee received
  • If it is a construction contract, can the owner use the thing for its intended purpose
  • Can the promisee be compensated with money damages for any defects
  • Did the promisor act in good faith
31
Q

What is the Statute of Limitations?

A

Limits the time within which an injured party may file suit

32
Q

What is a Material Breach?

A

A breach that substantially harms the innocent party.

33
Q

When will a court not discharge an agreement due to impossibility?

A

If honoring the deal merely imposed a financial burden

34
Q

What is Interest?

A

A legal right in something

35
Q

What are the three causes that generally cause true impossibility?

A
  • Destruction of the subject matter
  • Death of the promisor in a personal services contract
  • Illegality
36
Q

What are the four principal contract interests a court seeks to protect?

A

Expectation Interest
Reliance Interest
Restitution Interest
Equitable Interest

37
Q

What is an Expectation Interest designed to do?

A

Put the injured party in the position she would have been in had both sides fully performed their obligations.

38
Q

What is the Landmark case that deals with Expectation Interest?

A

Hawkins v. McGee - Hairy Hand

39
Q

What are the typical three parts expectation damages are made up of?

A

Compensatory Damages
Consequential Damages
Incidental Damages

40
Q

What are Compensatory Damages

A

Are those that flow directly from the contract

41
Q

What are Consequential Damages?

A

Those that result from the unique circumstances of the plaintiff. Also known as Special Damages.

42
Q

What are Incidental Damages?

A

Are the relatively minor costs that the injured party suffers when responding to the breach.

43
Q

What is the golden rule in contract cases?

A

To give successful plaintiffs “the benefit of the bargain”, and not to punish defendants.

44
Q

What are Direct Damages?

A

Those that flow directly from the contract. They are the most common monetary award for the expectation interest.

45
Q

When are consequential damages available?

A

If they are a foreseeable consequence of the breach.

46
Q

What is Novation?

A

If there is an existing contract between A and B, a novation occurs when A agrees to release B from all liability on the contract in return for C’s willingness to accept B’s liability

47
Q

What case does the rule regarding Consequential damages come from?

A

Hadley v. Baxendale.

48
Q

To win expectation damages, the injured party myst prove the breach of contract caused damages that can be ______?

A

Quantified with reasonable certainty

49
Q

What is a Reliance Interest designed to do?

A

To put the injured party in the position he would have been had the parties never entered into a contract

50
Q

What is Rescission?

A

The undoing of a contract, which puts both parties in the position they were in when they made the agreement

51
Q

What is Specific Performance?

A

Compels the parties to perform the contract they agreed to when the contract concerns the sale of land or some other unique asset

52
Q

What is an Injunction?

A

A court order to do something or refrain from doing something

53
Q

What is Mitigate?

A

To keep damages as low as possible

Legal & Regulatory Aspects of FP (26 decks)

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