Law Quiz 3 Flashcards
void
synonyms: cancel, not do, invalid, scratched, revoked, null
ex. a contract that was made about selling crack is immediately void, a contract signed by a three year old is void
voidable
something that is capable of being voided
ex. drunk people and incompetent people
rule for contract with drunk people
a contract entered into by an intoxicated party is voidable by them if the other party knew or had reason to know of the intoxication
definition of incompetent person
someone who does not have mental faculties or ability to understand what they’re doing
rule for contract with incompetent people
contracts entered into by incompetent persons are voidable at their options
(but must be voided within a promptly reasonable time, usually 30 days or less)
every contract has ____ and _____
every contract has rights (fruits/benefits of the contract) and duties (obligations/burdens of the contract)
example of rights and duties in contract to work at PC
Rights of teacher: to payment, to space on campus, to materials like computers, to tell the chair when you can teach
Rights of PC: to come in and make sure good teaching, to within reason tell what needs to be taught and what can’t be taught
Duties of teacher: to teach, to advise, to hold office hours, to grade within reasonable time, to follow handbook
Duties of PC: to paying, to giving health insurance, to maintain facilities
3 ways a contract can impact 3rd parties
- a party assigns or gives rights to a 3rd party, giving rights to next few years of a contract payment to someone for some reason
- a party delegates their duties under the contract to a 3rd party, PC has contract with snowplow company, they hire someone else
- the purpose of the contract is to benefit a third party, child support, student loans held by parents,
are partial assignments of contract right permissible
yes
3 situations contract rights wouldn’t be assignable
- where the terms of the contract expressly prohibit assignment
- where the contract involves highly personal contract rights (musician. artist, athlete. highly personal doesn’t mean confidential, it means unique/one of a kind)
- where the assignment would materially increase the risk/burden on the other party
5 ways contracts can end
- full performance by all parties (most common way that it would end, when people do everything it said)
- material breach of a party
- by operation of a law (ex. death of a party, the purpose of the contract becomes illegal (ex. you have a contract to sell a certain chemical, the chemical becomes outlaws))
- expired by its terms (ex. sports contract. could be both 1 and 4 full performance and it just ran out)
- agreement of the parties (to end it)
conditions
sometimes contracts have conditions that must be met before a party needs to preform
if X, then Y
2 types of conditions
- satisfaction of a party
- satisfaction of a third party
satisfaction of a party subjective rule
if the contract involves something subjective (ex. the fit and feel of a suit, taste, opinion, etc.) then all that matters is whether the party is satisfied or not
satisfaction of a party objective rule
if the contract involves something objective (measurable, quantifiable) then the party’s satisfaction must be reasonable. if 100 people would look at it and say its reasonable, can’t rejcet it
material (in terms of material breach)
substantial/significant enough to matter
Contract for 1,000,000 chopsticks, only 999,996 delivered -> missing 34. Did the chopstick supplier breach the contract? Yes. Did the chopstick supplier materially breach the contract? No
rule for determining if a breach was material
we look at the number and kind of things at issue in the breach
Ex. Contract requires a pharmaceutical company to deliver a vaccine that is 100% effective. Due to supply chain issues, the company delivers a vaccine that is 99.9966% effective. Is this a material breach? Depends how many people it’s going to and what it’s treating
force majeure
superior force
sometimes a party can be excused from performing under a contract if a serious external event occurs which prevents the parties performance (an Act of God)
Ex. natural disaster, huge accidents outside of the parties control, disability prevents performance, hurricane, war, riot, pandemic
3 primary remedies for a breach of contract
- compensatory damages ($)
- equitable remedies (fairness)
- resitution
what is restitution
giving something to the non-breaching party which they gave or provided to the breaching party
ie. restoring it to the nonbreaching party
Ex. gold bars used to make custom bracelets by jeweler, if jeweler stopped performing you would want the gold bars back
golden rule of contract law
to put the non-breaching party in the same position they would’ve been in had the contract been performed
most common type of damages people seek
compensatory (money)
for compensatory damages to be recoverable, they must be:
- foreseeable (logical connections between the breach and the damages)
- reasonably calculable (can’t just guess what the numbers are, need to be able to back up the claim by breaking the number down)
- unavoidable (the nonbreaching party must mitigate or minimize its damages after the other party breaches the contract, can’t just let the pipe leak so you could claim more damages/a full new carpet)
formula for calculating compensatory damages
Loss of value + Incidental damages + consequential damages - loss/cost avoided