Chapter 11: Discharge And Breach Flashcards
Discharge
When the parties are relieved of the need to fulfill any promises
Performance
Parties fulfill all obligations in contract
-any deviation could be considered a breach
Time is not of the essence
Party is entitled to perform late even if the contract sets a specific date
- does not remove liability of lateness
- default in contract unless explicitly states otherwise (I.e. time is of the essence)
Debtor
Party that owes money
Creditor
Party entitled to money
Legal tender
Payment of notes (bills) and coins to a certain value
Substantial performance
Performance that satisfies contract but is defective or incomplete in some way
Entire contract
No part of the price is payable unless all work is done
Option to terminate
Term that allows one or both parties to terminate
Conditional subsequent
Agreement (contract) will be terminated if a certain event occurs
True condition precedent
Contractual term that states an agreement will come into existence only if a certain event occurs
Condition precedent
Contractual term that states while contract is made immediately it does not have to be performed until an action/event occurs
Acceleration clause
While one action is restricted by conditional precedent the other party can accelerate another action necessary for event to happen
Subsidiary obligations
Primary actions may be suspended but parties must perform subsidiary obligations immediately
Recission
When fresh consideration is needed for a subsequent contract
Accord & satisfaction
Party give up right to demand contractual performance in exchange for new benefit
Novation
One contract is replaced with another
Release
An agreement under seal to terminate a contract (substitute for consideration)
Waiver
A party abandons right to insist on contractual performance
Gratuitous promise
Bestowed or granted without claims, requires no consideration because is given for free
Gift
Frustration
Impossible to perform/ performance would have a difficult result because of outside events
Acknowledgement
An exception to the statute of limitations
-when debtor admits debt exists it restarts limitation period
Condition term
Breach would subsequently deprive innocent party of the expected benefit of the contract
-remedy: discharge contract and claim damages for losses
Warranty
Breach would not deprive innocent party of the expected benefit of the contract
-remedy; entitled to any damages ONLY
Intermediate
Term that may or may not deprive innocent party of the expected benefit depending on the circumstances
Defective performance
Party fails to properly perform an obligation that is due under contract
Deviation
Transport departs from agreed upon route or manner of transport
Self-induced impossibility
Impossibility caused by one party (who are therefore liable) that frustrates contract
Anticipatory breach
Party indicates in advance that breach will occur
Innocent party remedies:
- wait until obligation is due and claim damages
- discharge contract and claim damages after acceptance of breach
