Performance & Remedies

Question 1

T/F: Implied in every contract are certain conditions that must transpire for performance to occur; otherwise, the duty to perform can be discharged.

Answer 1

True

Question 2

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

Answer 2

1. Precedent
2. Subsequent
3. Concurrent

Question 3

What is a precedent condition?

Answer 3

Something that must be present or occur before a party has a duty to perform.

Question 4

What is a subsequent condition?

Answer 4

Something that must be present or occur after a duty to perform has arisen.

Question 5

What is a concurrent condition?

Answer 5

Each party’s duty to perform is dependent upon the other party’s absolute duty to perform at the same time.

Question 6

What happens when a condition precedent fails?

Answer 6

The duty to perform is discharged.

Question 7

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

Answer 7

1. Release
2. Waiver
3. Mutual rescission
4. Novation
5. Accord & satisfaction

Question 8

What is a novation?

Answer 8

New party is substituted for one of the original parties.

Question 9

What is an accord and satisfaction?

Answer 9

An agreement where the original contract can be satisfied by the original performance or by a different performance.

Question 10

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

Answer 10

1. Statute of limitations
2. Bankruptcy
3. Impossible or impractical
4. Material alteration

Question 11

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

Answer 11

1. Illegality
2. Death or insanity
3. Destruction of subject matter
4. Commercial impracticability

Question 12

Define waiver.

Answer 12

Relinquishment of a right due to a party’s breach.

Question 13

Define mutual rescission.

Answer 13

Mutual agreement to discharge contractual obligations.

Question 14

Define rescission.

Answer 14

The undoing of a contract.

Question 15

List the types of damages available for remedies.

Answer 15

1. Nominal
2. Compensatory
3. Punitive
4. Liquidated
5. Consequential

Question 16

Define consequential damages.

Answer 16

Foreseeable loss known by the breaching party. E.g., penalties.

Question 17

Define liquidated damages.

Answer 17

Specific sum is to be paid when there is a breach of contract.

Question 18

What is mitigation of damages?

Answer 18

When a breach takes place, the law usually imposes on the non-breaching party to take actions to mitigate (reduce) the amount of damages owed.

Question 19

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

Answer 19

1. Specific performance
2. Rescission & restitution
3. Quasi-contract recovery

Question 20

What is a quasi-contract recovery?

Answer 20

Remedy to give a reasonable value benefit to 1 party and avoid unjust enrichment. E.g., a person who worked 1 month and then was released from his employment agreement. He is entitled to 1 month worth of compensation.

Question 21

T/F: The running of the statute of limitations bars access to judicial remedies.

Answer 21

True

Question 22

T/F: Assignment of rights discharges a party from performance.

Answer 22

False

Question 23

T/F: Death of the party who is to receive the services discharges the party’s duties.

Answer 23

False. Can still perform on behalf of their estate.