Lesson 7: Types of Lawsuits

Question 1

Breach of Contract

Answer 1

The failure by a purchaser or seller to carry out a material part of a contract at the appointed time is a breach of contract.

Question 2

Anticipatory Breach

Answer 2

An anticipatory breach occurs when a party to the contract communicates to another party the intention not to perform.
The communication may be verbal, in writing, or by behavior.

Question 3

Substantial performance

Answer 3

Substantial performance is compliance to the contract that is not total, but is sufficient enough to discharge a party from further obligation.

Question 4

The remedies due a party in the event of breach by the other are…

Answer 4

… damages, specific performance, recision and injunction.

Question 5

Damages

Answer 5

Damages are money recoverable by one suffering injury or loss, either to his person or property, because of a breach of contract.

Question 6

Two types of damages:

Answer 6

Damages may be compensatory (actual) or punitive.

Question 7

Actual or compensatory damages

Answer 7

Actual damages are those existing in fact or in reality. They are the actual loss suffered.

Question 8

Punitive damages

Answer 8

Punitive damages, or exemplary damages, on the other hand, are those awarded as punishment to the wrongdoer and as a deterrent to others contemplating committing a similar act.
These rarely happen.

Question 9

Specific performance

Answer 9

Specific performance is a court decree ordering someone to perform according to a contract. This remedy is an equitable one, and so can be instituted only if the legal remedy, the payment of money damages, does not provide adequate compensation for the loss.

Question 10

Recision

Answer 10

Recision is the cancellation of a contract restoring the parties to the position in which they were before the contract.
It is a judicial remedy asking a court to void a contract.
To rescind a contract is to treat it as if it had never been executed.

Question 11

Mistake

Answer 11

Mistake is an unintentional

error.

Question 12

Innocent misrepresentation

Answer 12

Innocent misrepresentation, sometimes called negligent misrepresentation, is an unintentional misrepresentation of a material fact.

Question 13

Undue influence

Answer 13

Undue influence is controlling another person to the point that the other person is unable to make a judgment by themselves.

Question 14

Duress

Answer 14

Duress is coercion which overcomes someone’s will or intention.

Question 15

Fraud

Answer 15

Fraud, the most serious of these causes, is the willful intention to deceive.

Question 16

An injunction

Answer 16

An injunction is the issuance by a court of a writ (an order in writing) forbidding a defendant from doing something or commanding a defendant to do something.

Question 17

Procuring cause

Answer 17

Procuring cause is that event which initiates a series of continuing occurrences bringing about a final outcome. To be paid, a broker, in theory at least, must be the procuring cause of a sale.

Question 18

Foreclosure

Answer 18

Foreclosure is the process of taking and selling a person’s property to satisfy a debt in the event of default.
Noncompliance with any of the covenants or conditions of the mortgage or trust deed by the borrower can result in foreclosure.

Question 19

Arbitration

Answer 19

Arbitration is the non judicial submission of a controversy to an impartial third party for resolution.

Question 20

The broker’s activity is limited to the following circumstances:

Answer 20

1. His office must be connected with the transaction as broker.
2. There must be no charge for preparing the documents other than the normal commission.
3. The documents must be prepared on commonly used printed standard and approved forms.

Question 21

the broker should not, under any circumstances:

Answer 21

1. He should not prepare any legal documents.
2. He should not prepare any documents which cannot be properly prepared on the standard and approved printed form.
3. He clearly should not draw wills, contracts, agreements and so forth.