Contracts III - Discharge

Question 1

What is contract interpretation?

Answer 1

court decision in disputes regarding the meaning of a part of the contract

Question 2

What are the 2 types of contract interpretation?

Answer 2

1. Strict - considers the PRECISE MEANING of words

2. Liberal - considers the INTENT

Question 3

What is rule of contra proferentem?

Answer 3

When a contract is ambiguous, it will be in favour of the recipient of the contract.

Question 4

What is parol evidence rule?

Answer 4

Written agreement ALWAYS overrules verbal

Question 5

What are the 5 ways a contract may be discharged?

Answer 5

1. Performance
2. Discharge pursuant to express terms
3. Agreement to discharge
4. Discharge by frustration
5. Discharge by breach

Question 6

What is performance discharge?

Answer 6

All parties have fulfilled their obligations of the contract

Question 7

What is discharge by express terms?

Answer 7

The contract can stipulate that certain events may terminate the contract

Question 8

What is agreement to discharge?

Answer 8

Parties agree to terminate the contract

Question 9

What is discharge by frustration

Answer 9

Fundamental change in circumstances that hinders parties from fulfilling the contract

Question 10

What is discharge by breach?

Answer 10

Court decided. If a party fails to meet their obligations under the contract

Question 11

Contract term: condition

Answer 11

essential obligation to the contract

Question 12

Contract term: warranty

Answer 12

obligation that is not essential.

Key issue in lawsuit is determining what is a condition and what is a warranty (minor term)

Question 13

What is repudiation?

Answer 13

When one party expressly notifies the other (or indicates through conduct) that it does not intent to fulfill the obligations of the contract.

Question 14

What is a remedy?

Answer 14

non-defaulting party is entitled to damages

Question 15

What are direct damages?

Answer 15

The difference between the value of the performance received and the value of performance promised in the contract

Question 16

What are indirect damages?

Answer 16

Loss of profit caused by the breach

Question 17

What is duty to mitigate?

Answer 17

The party that received the damage must do everything they can to reduce the damage

Question 18

What is quantum meruit?

Answer 18

Party will receive as much as is deserved even though the contract is breached

Question 19

What is specific performance?

Answer 19

The court stipulates that a party of a contract is obligated to perform a specific task to remedy the contract dispute.

Question 20

What is injunction?

Answer 20

Court order that prohibits party from performing an act.. Only granted when a contract contains a “negative condition”, like “won’t do X”

Question 21

What is a fundamental breach?

Answer 21

Breach that goes to the root of the contract and deprives a party of the benefit of the contract.