Contracts - Performance & Remedies

Question 1

List the ways a contractual obligation can be discharged by operation of law.

Answer 1

1. Material Alteration;
2. Statute of Limitations;
3. Bankruptcy Decree;
4. Impossibility or Impracticability of performance.

Question 2

What happens when a condition precedent fails?

Answer 2

The duty to perform is discharged.

Question 3

Define “mutual rescission.”

Answer 3

An enforceable mutual agreement to discharge all contract obligations and restore the parties to their pre-contract positions.

Question 4

List the types of contractual discharge that can occur by agreement or party action.

Answer 4

1. Release;
2. Waiver;
3. Mutual Recission;
4. Novation;
5. Accord and Satisfaction.

Question 5

Define rescission.

Answer 5

The undoing of a contract so as to return the parties to their original position.

Question 6

List the ways a contract can be considered impossible or impracticable.

Answer 6

1. Death or Insanity;
2. Destruction of Specific Subject Matter;
3. Illegality;
4. Commercial Impracticability.

Question 7

What requirements must be present for the enforceable liquidated damages provisions of a contract?

Answer 7

1. Damages difficult to estimate if a breach;

2. The amount stated is a reasonable sum estimate (not a penalty).

Question 8

Define waiver.

Answer 8

A relinquishment of a right due to a party’s breach.

Question 9

Define novation.

Answer 9

By a valid contract, a new party is substituted for one of the original parties thereby terminating (discharging) the original contract.

Question 10

Define “compensatory damages.”

Answer 10

All costs or loss actually suffered and proved caused by the breach.

Question 11

Define “liquidated damages.”

Answer 11

A specific sum is agreed to be paid in the formation of the contract in the event that in the future the contract is breached.

Question 12

What is meant by substantial performance?

Answer 12

Substitute performance done in good faith.

Substituted performance is for practical purposes just as good.

Party can be compensated for substitution.

Question 13

List the types of damages available for remedies.

Answer 13

1. Nominal;
2. Compensatory;
3. Punitive;
4. Liquidated.

Question 14

Define “quasi-contract recovery.”

Answer 14

A remedy to give a reasonable value benefit to one party and avoid an unjust enrichment received by the other party.

Question 15

Other than damages, what are the remedies for contract breaches?

Answer 15

1. Specific Performance;

2. Rescission.

Question 16

List the various types of conditions that can exist in contract sales.

Answer 16

1. Precedent;
2. Subsequent;
3. Concurrent.

Question 17

List the ways a contract can be discharged.

Answer 17

1. By occurrence of failure of a condition;
2. By performance or breach of contract;
3. By agreement;
4. By operation of law.