Chapter 11 - Conclusion to Contracts Flashcards
What is a Third Party Beneficiary?
Someone who is not a party to the contract but stands to benefit from it.
What is a Promisor?
The person who makes the promise that the third party beneficiary benefits from.
What is a Promisee?
The person to whom a promise was made.
When is someone an Intended Beneficiary?
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
What is a Creditor Beneficiary
A third party beneficiary to whom the promisee is fulfilling some duty
What is a Donee Beneficiary?
A third party beneficiary to whom the promisee is making a gift.
What is an Incidental Beneficiary?
A third party beneficiary that fails to qualify as a creditor or donee beneficiary
What is an Assignor?
The person making an assignment
What is an Assignee?
The person receiving an assignment
What is an Obligor?
The person obligated to do something under a contract
You _______duties and _______rights?
Delegate, Assign
Any contractual rights may be assigned unless the assignment…? 3
- 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
When is another situation when assignment is not permitted?
When the obligor is agreeing to perform personal service.
When must an assignment be in writing?
When someone wants to assign rights governed by the Statute of Frauds
When can an assignee enforce her contractual rights against the obligor?
Once the assignment is made the obligor is notified.
Can an obligor legally affect an assignee?
The obligor may generally raise all defenses that she could have raised against the assignor.
What is Delegation of Duties?
A contracting party transfers her duties pursuant to a contract to someone else
What is a Delegator?
A person who gives his obligation under a contract to someone else.
What is a Delegatee?
A person who receives an obligation under a contract from someone else
Does delegating a duty relieve you legally of a duty?
No
What is an Assignment of Rights?
A contracting party transfers his rights under a contract to someone else
What is an Obligee?
The person how has an obligation coming to her
An obligor may deligate his duties unless….?3
-Delegation would violate public policy
-The contract prohibits delegation
or
-The obligee had a substantial interest in personal performance by the obligor
What is Rescind?
To terminate a contract by mutual agreement
When is a party rendered to require strict performance?
When the contract expressly demands it and such a demand is reasonable
What is Strict Performance
Performing a task exactly correct/complete
What is Substantial Performance
Performing a task most of the way to complete/approved
In a contract for services what does a party that performs substantial performance receive?
The full contract price, minus the value of any defects
What will a party receive that does not substantially perform all of its obligations?
The value of the work performed, if any
What four issues does the court look at to determine substantial performance?
- 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
What is the Statute of Limitations?
Limits the time within which an injured party may file suit
What is a Material Breach?
A breach that substantially harms the innocent party.
When will a court not discharge an agreement due to impossibility?
If honoring the deal merely imposed a financial burden
What is Interest?
A legal right in something
What are the three causes that generally cause true impossibility?
- Destruction of the subject matter
- Death of the promisor in a personal services contract
- Illegality
What are the four principal contract interests a court seeks to protect?
Expectation Interest
Reliance Interest
Restitution Interest
Equitable Interest
What is an Expectation Interest designed to do?
Put the injured party in the position she would have been in had both sides fully performed their obligations.
What is the Landmark case that deals with Expectation Interest?
Hawkins v. McGee - Hairy Hand
What are the typical three parts expectation damages are made up of?
Compensatory Damages
Consequential Damages
Incidental Damages
What are Compensatory Damages
Are those that flow directly from the contract
What are Consequential Damages?
Those that result from the unique circumstances of the plaintiff. Also known as Special Damages.
What are Incidental Damages?
Are the relatively minor costs that the injured party suffers when responding to the breach.
What is the golden rule in contract cases?
To give successful plaintiffs “the benefit of the bargain”, and not to punish defendants.
What are Direct Damages?
Those that flow directly from the contract. They are the most common monetary award for the expectation interest.
When are consequential damages available?
If they are a foreseeable consequence of the breach.
What is Novation?
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
What case does the rule regarding Consequential damages come from?
Hadley v. Baxendale.
To win expectation damages, the injured party myst prove the breach of contract caused damages that can be ______?
Quantified with reasonable certainty
What is a Reliance Interest designed to do?
To put the injured party in the position he would have been had the parties never entered into a contract
What is Rescission?
The undoing of a contract, which puts both parties in the position they were in when they made the agreement
What is Specific Performance?
Compels the parties to perform the contract they agreed to when the contract concerns the sale of land or some other unique asset
What is an Injunction?
A court order to do something or refrain from doing something
What is Mitigate?
To keep damages as low as possible
