R7 Contracts Part 2

Question 1

Defenses

Answer 1

If there is defences innocent party duty discharged

Question 2

List of defenses:

Void
**remember short list of void, everything else voidable

&
Voidable

Answer 2

1) VOID ( AIM PE) 
A - Adjudicated incompetency 
I - Illegality 
M-  Mutual Mistake as to existence 
P - Duress (physical) 
E - Fraud in execution 

2) Voidable
- Mental incompetency
- Fraud in inducement
- innocent misrepresentation ( MAID with no S )
- Duress ( economic)
- Undue influence ( not arms length - so needs to be fair)
- Unilateral mistake
- minority
- intoxication

Question 3

More defenses

Answer 3

1) statue of limitations
- 4 to 6 years from the date of the breach

2) Statue of fraud: six contracts require a writing
MYLEGS

M- marriage 
Y - cannot be completed in a year 
L - land or lease >1 year 
E - Contracts by executors 
G - Goods for sale for $500 or more 
( services can be oral if possible to be complete within a year) 
if modified see modification price and determine  
S - Contracts that act as Surety 

Writing: can be anything, multiple pieces, signed by defendant

unless already performed, admitted or specially manufactured

3) Impossibility
destroyed, death, incapacity

4) Accord and satisfaction and substituted contract
Same parties , new agreement

5) Novation
new party and old part is released

6) Conditions can affect a party;s duty to perform

condition precedent ( e.g qualifying for a mortgage)
concurrent (face to face sales)
subsequent ( engagement ring)

7) Prevention of performance
- hindering
- failure to cooperate

8) parol evidence rule
- inadmissible : - anything said before signing is not considered in court as you already signed the doc ( so you need to read doc and agree to it)

admissible: modifications made after the agreement

Question 4

Remedies

Answer 4

-According to common law when there is a breach

1. If the breach is material or substantial
   - non breaching party can be discharged from the contract
2. If the breach is only minor
   - breaching party is not discharged but is entitled to damages

Damages
- Cash OR
- performance
………………………………………….

Compensatory Damages (benefit of bargain) 
- enough money to substitute performance 

Consequential damages if foreseeable
- collect reasonably foreseeable as a result of the breach

Specific performance ( USed with land or unique item)
- is not available for personal services
-

Liquidated damages
- if in contract use that if reasonable and not a penalty

Punitive damages

• not available for breach of contract or ordinary negligence
• only for fraud

………………………..
rescission or cancelation
- restore parties to their former position

• in common law not available if
  the contract has substantially performed
• non-breaching party only remedy is monetary damages for minor breach
  …………….

limitation of monetary damage

• foreseeability
• mitigation ( reasonable efforts to avoid damages)