Consequences of Affirmation

Question 1

What are the 2 choices a party has when they have the right to elect?

Answer 1

1. Affirm the contract, lose right to terminate and can potentially sue for damage
2. Terminate contract, lose right to future obligations and can sue for ONLY bargain loss

Question 2

What are the requirements for an election?

Answer 2

1. Aggrieved party MUST have knowledge of at least the facts that give the rise to the right to terminate
2. Aggrieved party MUST demonstrate an unequivocal intention to terminate or affirm contract

Question 3

What happens after a contract is affirmed?

Answer 3

1. Both parties remain obliged to perform
2. Aggrieved party may be able to completely perform the contract and EARN the contract price
3. Both parties can rely on subsequent events

Question 4

What are damages claimable for affirmation?

Answer 4

1. Damages for losses caused by breach
   –> except in the case of affirmation of a repudiation for anticipatory breach