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BLAW 220 > Chapter 11: Contract Performance, Breach, and Remedies > Flashcards

Chapter 11: Contract Performance, Breach, and Remedies Flashcards

1
Q

Voluntary Consent

A

Knowing and voluntary agreement to terms of contract.

  • Contract is voidable if there’s a lack of consent.
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2
Q

Parties who demonstrate that they don’t truly _______________ to the terms of a _____________ can either 1) _____________ out the contract or 2) _____________ (cancel) it. Thus in both situations, it is a _______________ contract.

A

agree; contract; carry; rescind; voidable

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3
Q

In some circumstances, ____________ made in the formation of a _______________, make the contract _______________.

A

mistakes; contract; voidable

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4
Q

Two types of mistakes that can be made

A

1) Mistakes of Fact

2) Mistakes of Value or Quality

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5
Q

Mistakes of Fact

A
  • Make contracts voidable
  • must invovle a “material fact”: fact that a reasonable person would consider important in determining course of action.
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6
Q

Two forms of Mistake of Fact

A

1) Unilateral Mistake: mistake made by one party.

2) Bilateral Mistake: mistake made by both parties.

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7
Q

Unilateral Mistake

A
  • Mistake made by one party.
  • Mistake doesn’t make grounds for reflief from contract for mistaken party –> contract is still enforceable.
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8
Q

Exceptions to Unilateral Mistake (2)

A
  1. Other party should’ve known a mistake was made.
  2. Mistake was not made out of gross negligence, but due to a substantial mathematical error in addition, subtraction, multiplication, and division.
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9
Q

Bilateral Mistake

A
  • Mistake made by both parties when both parties are mistaken about the same material fact.
  • When mistake made about same material fact by both parties, contract can be rescinded. (there was not a “meeting of the minds”).
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10
Q

Mistake of Value

A
  • Mistake in contract concerning market value / quality of an object.
  • Generally enforceable
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11
Q

In the case of ___________, when the _______________ party is lured into a contract, they can either ______________ the contract, or _______________ it and seek ____________ for any ______________ resulting from the ____________.

A

fraud; innocent; rescind; enforce; damages; harm; fraud

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12
Q

What is of Primary importance to a judge regarding contracts?

A

Intent

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13
Q

Requirements for Fraudulent Misrepresentation (4)

A
  1. Misrepresentation of a MATERIAL FACT must occur.
  2. Must be an intent to decieve
  3. Innocent party relied on misrepresentation
  4. Innocent party may seek damages if she was harmed as a result of misrepresentation.
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14
Q

Scienter

A

Knowledge of Misrepresenting party that material facts are misrepresented with the intent to decieve.

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15
Q

Undue Influence

A

When one party gretly & unfairly influences another party, overcoming the other party’s free will when entering the contract.

  • (lack of voluntary consent makes contract) voidable.
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16
Q

When a contract, arising from a _______________ relationship (i.e. __________-__________, ____________-____________, ____________-______________) enriches the _____________ party, the court will often assume the contract was formed from ____________ ______________.

A

fiduciary; parent-child; attorney-client; physician-patient; dominant; undue influence.

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17
Q

Duress

A

The use of threats to force someone to enter into a contract.

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18
Q

The threat made must be about a ____________ or _____________ act rendering a person _____________ of exercising their rights for it to be considered _______________.

A

worongful; illegal; incapable; duress

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19
Q

Privity of Contract

A

relationship between promisor and promisee to a contract, (tradtionally the only parties with rights and liabilities).

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20
Q

An exception to Privity of Contract

A

Transferring rights and responsibilities to from a party to a contract to another (third party) through…

1) Assignment (of responsibilities)

2) Delegation (of duties)

3) Third party beneficiary to contract (other 2 parties intend contract so that third party may benefit from contract.)

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21
Q

Obligee

A

One who has right to request an act be performed.

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22
Q

Obligor

A

One tasked w/ duty to perform the act.

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23
Q

Assignment

A

transfer of contractual rights to a third party.

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24
Q

Assignor

A

Party assigning rights.

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25
Q

Assignee

A

Party receiving rights

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26
Q

Assignee (_________ party) only recieves ___________ previously and ______________ had by the Assignor (_____________ party). As a result, the Assignee now has the __________ to request _______________ from the other _____________ party to a contract.

A

third; rights; originally; original; right; performance; original

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27
Q

Exceptions to Assignment:

  1. Assignment is _______________ by ______________
  2. The Contract is for ______________ services.
  3. The assignment changes the ____________ or ___________ of the obligor.
  4. The contract prohibits the _______________.
A

prohibited; statute; personal; risks; duties; assignment

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28
Q

Delegation

A

transfer of contractual duties to a third party.

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29
Q

Delegator

A

Party delegating duties.

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30
Q

Delegatee

A

Person to whom duties are delegated.

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31
Q

Exceptions to Delegation:

  1. When ____________ ____________ has been placed in the obligor.
  2. When _____________ of duty depends on the personal __________ of the obligor.
  3. When performance by a third party ___________ from what the obligee expected.
  4. When contract prohibits _____________.
A

special trust; performance; skills; varies; delegation

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32
Q

_______________ and ______________ can only take place ___________ the original contract was made.

A

Assignment; delegation; AFTER

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33
Q

Third Party Beneficiary

A

One who benefits from a contract (based on promise from an original party [promisor]), but whose not a party to the contract.

34
Q

Intended Beneficiary

A
  • A third party, for whose benefit is the basis for a contract being formed.
  • Third party may sue for Promisor’s breach in contract.
35
Q

Incidental Beneficiary

A

Third person who benefits from a contract, but whose benefit was not the reason a contract was made.

  • may not sue to enforce contract.
36
Q

Discharge

A

Termination of contractual obligations because.

  1. Both parties fully performed.
  2. Agreement of the parties
  3. Operation of law releases the parties.
37
Q

Performance

A
  • fulfilling contractual obligations w/ another.
  • normal way for contract to be discharged.
38
Q

Condition

A

Provision in a contract for occurence / nonoccurence of an event, which creates or terminates obligations.

(i.e. IF x happens, then contract goes into effect and y is expected of the other party. IF x doesn’t happen, then parties to contract are discharged, and y is not expected of the other party.)

39
Q

Condition Precedent

A

Condition must be fulfilled, before party’s performance can be required.

(i.e. Life insurance expects people seeking insurance to meet requirements BEFORE insurance company can grant person insurance.)

40
Q

Tender

A

Offer to perform by someone who is ready, willing, capable to do so.

41
Q

Performance based on Satisfaction: When the ___________-____________ of a contract is _______________, such that the _______________ on which the contract is formed is based on _____________ taste , the obligation is _________________, and full performance is based on the _______________ of the specified party in the contract (applies to things like art, tailored suits, portraits etc…).

A

subject-matter; personal; product; individual; conditional; satisfaction

42
Q

Types of Performance

A

1) Full Performance
2) Substantial Performance

43
Q

Full Performance

A

When parties performance is perfect, and there’s no question as to whether the contract has been performed.

44
Q

Substantial Performance (3)

A

Parties performance can be considered substantial if performance…
1) was done in good faith.
2) doesn’t vary from what was originally promised.
3) has same benefit promised in contract.

45
Q

Breach of Contract

A

Failure of Promisor to fulfill obligations of contract, without legal excuse.

46
Q

Types of Breach

A

1) Material
2) Minor

47
Q

Material Breach

A
  • When performance wasn’t even substantial.
  • Non-breaching party may be excused from their contractual obligations.
48
Q

Minor Breach

A
  • Non-breaching is temporarly excused from contractual obligations until breach is remedied.
    (Contract is not rescinded).
49
Q

Anticipatory Repudiation (Performance)

A

Declaration made when a party to a contract refuses to perform contractual obligation at a future time, BEFORE either party has a duty to perform.

50
Q

Reasonable Time (Performance)

A

Implied time of performance of duty, when no express time is stated in contract.

51
Q

Mutual Recission (Agreement)

A
  • Must include offer, acceptance, and consideration
  • Parties make a second agreement (contract), promising to not perform obligations of first contract AS consideration for the second contract.
52
Q

Novation (4) (Agreement)

A

Parties to a contract agree to substitute one of the existing original parties with a third party such that…

1) There is a previous valid obligation.
2) Parties agree to new contract.
3) Previous obligations are extinguished (old parties discharged)
4) There is a new valid contract

53
Q

Accord and Satisfaction (Agreement)

A

Agreement of parties to accept performance even if it different from what was originally promised.

54
Q

Accord

A

it IS the agreement;

Agreement for one party to perform, and the other to accept performance even if performance is different from what was originally promised.

55
Q

Satisfaction

A

it IS the performance;

Performance (usually payment) of one party, that takes place after accord.

56
Q

Liquidated Debt

A

Debt that is due and determined in amount.

57
Q

Unliquidated Debt

A

Debt that is undetermined in amount.

58
Q

Release (Agreement)

A

Contract wherein one party waivers right to pursue legal claims against another party.

59
Q

Material Alteration of Contract: The law allows ________________ parties to a contract to be _________________ from all _____________ if another party _____________ the written contract w/o the _______________ party’s ______________ of it.

A

innocent; discharged; obligation; altered; innocent; knowlege

60
Q

Impossibility of Performance

A

party to a contract is discharged due to unforeseen events, that happened at the time the contract was signed, that has rendered performance impossible

61
Q

Objective v. Subjective Impossibility

A

Objective: “It can’t be done [by anyone].”

Subjective: “It can’t be done by me.”

62
Q

Commercial Impracticability

A

party to contract is discharged because ability to perform has become too costly / difficult to perform based on events unforeseen by either party.

63
Q

Frustration of Purpose

A

Contract is discharged due to interrupting events [unforseeable by both parties] that make it impossible to attain the purposes both parties had in mind when making the contract.

64
Q

In the context of ______________ law, _________________ compensate the ______________________ party for the loss of a ________________. Courts believe it to be their responsibility to place the ________________ party (aka ______________ party) in the __________________ they would’ve been in had the _______________ been fully _________________.

A

contract; damages; non-breaching; bargain; non-breaching; innocent; position; contract; performed

65
Q

Types of Damages

A
  1. Compensatory
  2. Consequential
  3. Punitive
  4. Nominal
66
Q

Compensatory Damages

A

Damages to compensate non-breaching party for loss of bargain.

67
Q

Goal of Compensatory Damages

A

Restore what non-breaching party lost as a DIRECT result of loss of bargain.

“To make the person whole.”

68
Q

Consequential Damages

A

Foreseeable damages that result from party’s breach to contract, but caused by special circumstances beyond contract itself.

69
Q

Punitive Damages

A
  • Not generally awarded in contract law.
    Damages awarded to punish wrongdoer, and deter similar conduct in future.
70
Q

Nominal Damages

A

Damages imposed when non-breaching party didn’t face actual loss or injury, only a technical injury.

71
Q

Mitigation of Damages

A

Plaintiff (innocent party) is required to do whatever is necessary to minimize damages caused by defendant.

72
Q

Liquidated Damages

A

Dollar amount to be paid [by breaching party] in the future event, that a contract is breached.

73
Q

Penalty

A

Specifies dollar amount to be paid in the event that a contract is breached.

74
Q

Liquidated Damages v. Penalty

A

Liquidated Damages: Meant to restore what non-breaching party lost as direct result of breach / to make whole.

Penalty: Meant to penalize breaching party for their wrongful act.

75
Q

Waiver

A

Intentional and knowing relinquishment / surrender of legal rights.

76
Q

Recission (Remedy)

A

unmaking of a contract, meant to return parties to where they would be had the contract never been formed.

77
Q

Restitution (Remedy)

A

returning goods, property, funds, meant to return parties to the original position they would be in had breach never occurred.

78
Q

Specific Performance (Remedy)

A

Requires breaching party to perform promised act.

79
Q

Specific performance in many cases is a better ____________ than payment of ______________ _______________ because the ______________ originally promised may be of ______________ value than _______________ _____________ to substitute it. Also it prevents the non-breaching party from having to arrange a new ______________ for collecting ______________.

A

remedy; monetary damages; performance; more; monetary damages; contract; damages.

80
Q

Reformation (Remedy)

A
  • Agreement expressed in a contract is written incorrectly.
  • Court correct writing in contract to reflect true intention of each party.

BLAW 220 (17 decks)

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