Level 7: Discharge of Contracts

Question 1

Discharge: Operation of Law

Answer 1

discharge of contract goes against the desire of one or more of the parties

Question 2

Discharge Operation of Law: Full Performance

Answer 2

both parties did what they were supposed to do and received what they had hoped to receive, once all obligations are performed, a contract is considered executed and discharged

Question 3

Discharge Operation of Law: Expiration

Answer 3

once that date passes parties are released from future obligations and the contract discharges

Question 4

Discharge Operation of Law: Statute of Limitations

Answer 4

he event a party to a contract defaults in their performance, the wronged party must bring a lawsuit against the defaulting party within the time frame as set forth by the statute of limitations

Question 5

Discharge Operation of Law: Lack of Legal Element

Answer 5

the contract lacks legal standing or purpose or is unlawful in some way

Question 6

Discharge Operation of Law: Death or Incapacity

Answer 6

does not relieve the party of contractual obligations, an exception to this rule is made for personal services contracts

Question 7

Discharge Operation of Law: Bankruptcy

Answer 7

result in the discharge of a contract

Question 8

Discharge Operation of Law: Alteration of the Contract

Answer 8

a party to the contract attempts to modify the terms or conditions of the original contract in a material way, with or without the other party’s consent or knowledge

Question 9

Discharge Operation of Law Acts of the Parties: Merger

Answer 9

the original contract can be merged into a new agreement, and that the original agreement is discharged in the process

Question 10

Discharge Operation of Law Acts of the Parties: Mutual Agreement

Answer 10

mutual release of the duties that existed in the original contract qualifies as consideration in the new contract

Question 11

Discharge Operation of Law Acts of the Parties: Cooling-off Period

Answer 11

a window of time within which a party has the right to rescind specific types of contracts for any reason and without liability

Question 12

Discharge Operation of Law Acts of the Parties: Novation

Answer 12

a mutual agreement of the parties to replace an existing contract with a new one

Question 13

Discharge Operation of Law Acts of the Parties: Assignment

Answer 13

an original party to the contract transfers their rights to a new party, does NOT discharge original contract, the original party remains liable if the assigned party does not live up to the obligations of the contract

Question 14

Discharge Operation of Law Acts of the Parties: Accord and Satisfaction

Answer 14

parties agree to discharge the original contract in favor of a new one, wherein accepted performance is often less than what was initially owed

Question 15

Discharge Operation of Law Acts of the Parties: Revocation

Answer 15

a unilateral act, and, if the revoking party is unable to show cause, they could incur liability for their decision to revoke and may still be obligated to their duties according to that agreement

Question 16

Discharge Operation of Law Acts of the Parties: Renunciation/Abandonment

Answer 16

renounces their authority (and willingness) to act on the principal’s behalf

Question 17

Discharge of Contracts Visual Aid

Question 18

Breach of Contract

Answer 18

a party to an agreement who does not perform according to the terms and conditions of a contract (without cause)

Question 19

Breach of Contract: Specific Performance

Answer 19

courts ruling to compel the party to fulfill the contract as originally agreed

Question 20

Breach of Contract: Rescission

Answer 20

attempts to put the parties back in a position as though the contract never existed

Question 21

Breach of Contract: Forfeiture

Answer 21

a way to terminate the contract relationship but with compensatory recognition that one party was injured as a result of the contract

Question 22

Breach of Contract: Suit for Damages

Answer 22

suit must adhere to the statute of limitations and the courts are typically concerned with restoring the wronged party to the place that they were financially prior to the contract