Legal Terms Chapter 20 - Third Parties and Discharge of Contracts

Question 1

Accord

Answer 1

Instead of completing the terms when there is a dispute about a contract, the parties agree to perform in a different manner from that agreed upon originally; also called the offer.

Question 2

Accord and satisfaction

Answer 2

An agreement to perform a contract obligation in a different manner than originally called for, and the completion of that agreed-upon performance.

Question 3

Anticipatory breach

Answer 3

The announcement, before the time for performance, by a party to a contract that he or she is not going to perform.

Question 4

Assignee

Answer 4

One to whom a right is transferred by assignment.

Question 5

Assignment

Answer 5

The transfer of a contract right.

Question 6

Assignor

Answer 6

One who transfers a right by assignment.

Question 7

Bankruptcy

Answer 7

A legal process under the Federal Bankruptcy Act that aims to give debtors who are overwhelmed with debt a fresh start and to provide a fair way of distributing a debtor’s assets among all creditors.

Question 8

Breach of contract

Answer 8

One of the parties fails to carry out the terms of the contract.

Question 9

Compensatory damages

Answer 9

To compensate the plaintiff for actual losses resulting from the breach.

Question 10

Consequential damages

Answer 10

Losses that flow not directly from a breach of contract, but from the consequences of it; requires that parties have taken the possibilities into account when making the contract.

Question 11

Delegation

Answer 11

The transfer of a contract duty.

Question 12

Exemplary damages

Answer 12

Damages as a measure of punishment of the defendant’s wrongful acts; also called punitive damages.

Question 13

Impossibility

Answer 13

A method of discharging one’s obligations under a contract because it is impossible to perform, not merely difficult or costly; also called impracticality.

Question 14

Incidental beneficiary

Answer 14

One who is indirectly benefited by a contract.

Question 15

Incidental damages

Answer 15

Reasonable expenses that indirectly result from a breach of contract.

Question 16

Intended beneficiary

Answer 16

The third party of a contract made with the purpose of benefitting that party.

Question 17

Legal tender

Answer 17

Coins, paper, or other currency that is sufficient under law for the payment of debts.

Question 18

Liquidated damages

Answer 18

Damages that are agreed on by the parties at the time of the execution of a contract, in the event of a subsequent breach.

Question 19

Material breach

Answer 19

When a major or essential part of the contract has not been performed.

Question 20

Nominal damages

Answer 20

Damages in name only; token or trivial amounts of money awarded to the party who wins a lawsuit by proving that the defendant breached the contract, but suffers no actual monetary loss.

Question 21

Novation

Answer 21

An agreement whereby an original party to a contract is replaced by a new party.

Question 22

Performance

Answer 22

The parties do as they agreed to do under the terms of the contract.

Question 23

Satisfaction

Answer 23

The acceptance.

Question 25

Substantial performance

Answer 25

A doctrine allowing a contracting party to sue the other party for breach, even though slight omissions or deviations were made in the first party's own performance of the contract.

Question 26

Tender of payment

Answer 26

To offer to the other party the money owed under a contract.

Question 27

Tender of performance

Answer 27

To offer to do that which one has agreed to do under the terms of a contract.

Question 28

Third-party beneficiary

Answer 28

Someone for whose benefit a promise is made, but who is not a party to the contract.

Question 29

Time is of the essence

Answer 29

Time is critical.

Question 30

Toll

Answer 30

To bar, defeat, or take away.

Question 31

Tolled

Answer 31

They do not run, as in statutes of limitations during times of infancy or mental illness which would prevent a lawsuit from being dismissed for late filing.