Chapter 3: Summary Flashcards
Termination of contract
What are the three ways you can discharge a contract?
By Performance
By Frustration
By Breach
What are three ways you can discharge a contract by performance?
Fulfilling contractual duties.
Should be complete and exact.
Courts may accept substantial performance.
What is discharge of contract by frustration?
Forces outside the contract make performance impossible.
What is discharge of contract by breach?
Contractual duties not properly performed.
What are the two types of discharge of contract by breach?
Actual Breach
Anticipatory Breach
What is actual breach of contract?
At time of contract.
What is anticipatory breach of contract?
Before time of performance is due.
What are the two other alternatives to go to court?
Arbitration
Alternative Dispute Resolution
What are the advantages and disadvantages of arbitration and alternative dispute resolution?
Expertise
Cost
Privacy
Solutions
Speed
What are the remedies to breach of contracts?
Damages
What are the three types of damage?
Unliquidated
Liquidated
Penalty Clause
Who determines unliquidated damages?
The courts.
What is liquidated damages?
Genuine attempt to value.
Amount enforceable
What is a penalty clause damage?
Excessive/arbitrary
Amount not normally awarded
When may a penalty clause damage be awarded?
If felt it is excess in proportion to losses suffered.
What are the four different things to consider when valuing unliquidated damages?
Remoteness
Measure of loss
Equitable remedies
Types of injunction
What is meant by remoteness in relation to valuing unliquidated damages?
Only award for losses which are natural or in both parties’ contemplation.
What are the three things to consider when determining the measure of loss?
Expectation Interest
Reliance Interest
Parties have a duty to mitigate their losses.
How do you measure loss by the expectation interest?
What position did the claimant expect to be in?
How do you measure loss by the reliance interest?
What has the claimant lost out on by relying on the contract being performed?
When are equitable remedies available?
At discretion of the court.
What are the three different types of equitable remedies?
Specific Performance
Rescission
Injunction
What are the three types of injunction?
Mandatory
Prohibitory
Asset Freezing
What are the purpose of exclusion clauses?
Limit/exempt liability.
What are the two requirements of exclusion clauses?
They must be incorporated.
Must fulfil conditions of legislation.
How can an exclusion clause be incorporated?
By signature
By bringing to the other party’s attention at/before time of agreement.
How will the wording of exclusion clauses be interpreted?
Wording will be interpreted against the person trying to rely on them.
What are two pieces of legislation that exclusion clauses must fulfil?
Unfair Contract Terms Act
Consumer Rights Act
What does the Unfair Contract Terms Act apply to?
In all contracts between businesses except those specifically excluded.
What does the Consumer Rights Act apply to?
In contracts where one party is a consumer
