Chapter 3: Summary

Question 1

What are the three ways you can discharge a contract?

Answer 1

By Performance

By Frustration

By Breach

Question 2

What are three ways you can discharge a contract by performance?

Answer 2

Fulfilling contractual duties.

Should be complete and exact.

Courts may accept substantial performance.

Question 3

What is discharge of contract by frustration?

Answer 3

Forces outside the contract make performance impossible.

Question 4

What is discharge of contract by breach?

Answer 4

Contractual duties not properly performed.

Question 5

What are the two types of discharge of contract by breach?

Answer 5

Actual Breach

Anticipatory Breach

Question 6

What is actual breach of contract?

Answer 6

At time of contract.

Question 7

What is anticipatory breach of contract?

Answer 7

Before time of performance is due.

Question 8

What are the two other alternatives to go to court?

Answer 8

Arbitration

Alternative Dispute Resolution

Question 9

What are the advantages and disadvantages of arbitration and alternative dispute resolution?

Answer 9

Expertise
Cost
Privacy
Solutions
Speed

Question 10

What are the remedies to breach of contracts?

Answer 10

Damages

Question 11

What are the three types of damage?

Answer 11

Unliquidated

Liquidated

Penalty Clause

Question 12

Who determines unliquidated damages?

Answer 12

The courts.

Question 13

What is liquidated damages?

Answer 13

Genuine attempt to value.

Amount enforceable

Question 14

What is a penalty clause damage?

Answer 14

Excessive/arbitrary

Amount not normally awarded

Question 15

When may a penalty clause damage be awarded?

Answer 15

If felt it is excess in proportion to losses suffered.

Question 16

What are the four different things to consider when valuing unliquidated damages?

Answer 16

Remoteness

Measure of loss

Equitable remedies

Types of injunction

Question 17

What is meant by remoteness in relation to valuing unliquidated damages?

Answer 17

Only award for losses which are natural or in both parties’ contemplation.

Question 18

What are the three things to consider when determining the measure of loss?

Answer 18

Expectation Interest

Reliance Interest

Parties have a duty to mitigate their losses.

Question 19

How do you measure loss by the expectation interest?

Answer 19

What position did the claimant expect to be in?

Question 20

How do you measure loss by the reliance interest?

Answer 20

What has the claimant lost out on by relying on the contract being performed?

Question 21

When are equitable remedies available?

Answer 21

At discretion of the court.

Question 22

What are the three different types of equitable remedies?

Answer 22

Specific Performance

Rescission

Injunction

Question 23

What are the three types of injunction?

Answer 23

Mandatory

Prohibitory

Asset Freezing

Question 24

What are the purpose of exclusion clauses?

Answer 24

Limit/exempt liability.

Question 25

What are the two requirements of exclusion clauses?

Answer 25

They must be incorporated. Must fulfil conditions of legislation.

Question 26

How can an exclusion clause be incorporated?

Answer 26

By signature By bringing to the other party's attention at/before time of agreement.

Question 27

How will the wording of exclusion clauses be interpreted?

Answer 27

Wording will be interpreted against the person trying to rely on them.

Question 28

What are two pieces of legislation that exclusion clauses must fulfil?

Answer 28

Unfair Contract Terms Act Consumer Rights Act

Question 29

What does the Unfair Contract Terms Act apply to?

Answer 29

In all contracts between businesses except those specifically excluded.

Question 30

What does the Consumer Rights Act apply to?

Answer 30

In contracts where one party is a consumer