Test Two Flashcards
DISCUSS THE 5 WAYS A CONTRACT MAY BE DISCHARGED BY OPERATION OF LAW.
- By alteration or material change by a party
- Destruction of the written contract with intent to discharge it
- Bankruptcy
- Statute of limitations
- Contractual limitations-says in contract that it will terminate on a specific day.
GIVE THREE EXAMPLES NOT IN THE TEXT BOOK WHERE A COURT MIGHT ORDER SPECIFIC PERFORMANCE UNDER A CONTRACT THAT A PARTY HAS BREACHED.
Has to involve a unique object
- Muffle rifle- sell to b but decided not to, b sued a.
- Painting
DISCUSS THE 4 WAYS AN AGENCY RELATIONSHIP CAN BE TERMINATED BY OPERATION OF LAW.
- If either the principle or agent were to die or be legally insane-termination by operation of law
- Bankruptcy of either party
- Impossibility of performance- ex. if agency is destroyed
- When the country of the principle is at war with the country of the agent.
UNDER CERTAIN CIRCUMSTANCES THE PRINCIPAL MAY BE LIABLE FOR THE TORTS OR CRIMES OF THE AGENT. DISCUSS 3 SUCH CIRCUMSTANCES.
When agent is negligent
If the agent forms an intentional tort
If the agent commits fraud
If the agent breaks a Gov. Regulation
2 things must occur:
Must be done by agent within scope of the agency
Does the act while trying to promote the business.
YOU HAVE JUST OPENED A NEW BUSINESS SELLING HIGH END WOMEN’S DRESS SHOES IMPORTED FROM ITALY. WHAT POLICIES WOULD YOU WANT TO HAVE TO AVOID OR AT LEAST LIMIT YOUR COMPANY BEING HELD VICARIOUSLY LIABLE FOR THE TORTS AND/OR CRIMES OF THE 20 AGENTS YOU PLAN TO RETAIN TO MARKET YOUR PRODUCT THROUGHOUT THE U.S.?
Background/criminal check, civil litigation.
Ask for references and check them
After hired-do not retain them as agents once you find that they have something that could be a lawsuit such as drug addict, sexual harassment, etc.
Policies of random alcohol and drug testing
Fidelity bond-insurance that will pay the agency money for any loss that you would receive due to the agent.
CREDITOR BENEFICIARY
A want to sell to B, A also owes money to C as part of a debt. A want to sell to B the object/business with the debt owed to C still attached
DONEE BENEFICIARY
Life insurance
BENEFICIARY IDENTIFIED BY CLASS
can be bwteen differnt levels of workers- race track example- promotor, owner and racer. racer being the third party beneficiary, can sue the owner if he is not paid.
INCIDENTAL BENEFICIARY
Does end up benefiting from a contract from two other parties even though it is not intended for them to be a beneficiary
ASSIGNOR
Can enter into a contract and assign away to right under that contract to someone else
ASSIGNEE
The person you sign your right to
CONDITION PRECEDENT
Comes before the contract is performed. Must happen for the contract to be valid.
CONDITION SUBSEQUENT
A condition within the contract that happens after the contract is made.
TENDER
A way to show that you are preforming the contract. Delivering an object or paying money. Have to physically hand them the money.
TIME IS OF THE ESSENCE
To get a service within a certain amount of days.
SUBSTANTIAL PERFORMANCE
Construction-gets 95% done by deadline but any amount of work unfinished will not be paid for
CONSUMER CREDIT PROTECTION ACT
Can cancel within a three day period
RECISSION
When you cancel a contract and return both parties to status quo (to the way they were before the contract)
NOVATION
When you have a contract but in the middle decide to change the contract or its terms.
ACCORD AND SATISFACTION
Occurs when you can’t agree on how you are supposed to make a payment under a contract. Ex. 1000 or 3000 was owed. Someone sent 2000 as a compromise.
DISCHARGE BY IMPOSSIBILITY
Something happen during the course of the contract which makes it impossible to uphold your side of the contract
FORCE MAJURE
Listing in the contract, if impossible events do occur that make the contract impossible then the contract will be canceled.
ANTICIPATORY REPUDIATION
The other side to a contract warns that they are going to breach the contract
MITIGATE DAMAGES
Someone has breached a contract, effort must be put in to minimize damage.
REFORM A CONTRACT
When the court rewrites a contract in the way the parties meant for it to read originally.
LIQUIDATED DAMAGES
In the event that there is a breach of contract and both sides agree they can set an amount for any damages. Must be reasonable.
AMERICAN RULE
In a breach of contract, each party is responsible for their attorney fees.
SPECIAL AGENT
Hired to be your agent, only to handle one specific transaction.
GENERAL AGENT
Hired as agent, to handle all the business, it the state, or the country, or the world
UNIVERSAL AGENT
Retaining someone as an agent for everything that you could do legally they can do. Power of Attorney.
RATIFICATION OF AGENCY
Occurs where you have no hired someone as an agent but they do something to get your business and you accept it, then you accept their work as your agent.
EXPRESS AUTHORITY
Principle states orally or in writing.
INCIDENTAL AUTHORITY
Give agent some but not all authority
APPARENT AUTHORITY
When the principle gives a person the stuff to be seen as an agent even though they are not hired as an agent. You will be bound by whatever the agent does.
UNDISCLOSED PRINCIPAL
Agent wants to do business with you but they will not tell you who they are working for.
SPECIFIC PERFORMANCE
the court will order the contract terms be carried out
A THIRD PARTY BENEFICIARY IS SOMEONE WHO IS NOT AN ACTUAL PARTY TO A CONTRACT, BUT WHO WILL BENEFIT FROM THE CONTRACT. DISCUSS THE CHARACTERISTICS OF A CREDITOR BENEFICIARY, A DONEE BENEFICIARY, AND AN INCIDENTAL BENEFICIARY, AND GIVE AT LEAST ONE EXAMPLE OF EACH
Creditor Beneficiary: The intended beneficiary, promisee’s primary intent is to discharge a duty owed to the third party.
Ex. A is selling a business but still owes payments on it to B. A sells business along with the debts to C.
Donne Beneficiary: intended, to whom the promisee’s intent primary intent in contracting is to give a benefit.
Ex. life insurance broker
Incidental Beneficiary: Not intended
A AND B ENTER INTO A BINDING CONTRACT FOR PERFORMANCE OF A CERTAIN SPECIFIED ACT. B THEN ASSIGNS HIS RIGHTS UNDER THE CONTRACT TO C, MAKING C THE “ASSIGNEE”. DISCUSS WHAT RIGHTS C WILL HAVE IF THE CERTAIN SPECIFIED ACT
(1) REQUIRED A TO PAINT B’S HOUSE, WHICH IS HALF THE SIZE OF C’S HOUSE; (2) REQUIRED A TO PAINT B’S HOUSE TO B’S PERSONAL SATISFACTION; (3) REQUIRED B TO PAINT A’S PORTRAIT; (4) REQUIRED A TO LOAN MONEY TO B WITH B TO REPAY THE MONEY IN 6 MONTHS AND C DOES NOT HAVE A JOB.
None of them are valid.
WHEN THE OCCURRENCE OR NONOCCURRENCE OF AN EVENT, AS EXPRESSED IN A CONTRACT, AFFECTS THE DUTY OF A PARTY TO THE CONTRACT TO PERFORM THE EVENT, IT IS CALLED A “CONDITION”. DEFINE THE TERMS “CONDITION PRECEDENT” AND “CONDITION SUBSEQUENT” AND GIVE AN EXAMPLE OF EACH THAT IS NOT IN THE TEXT BOOK.
Precedent: Must be done before the contract is made
Subsequent: written into contract and must be preformed after contract is made
DISCUSS THE 8 WAYS THE PARTIES MAY DISCHARGE THEIR OBLIGATIONS BY AGREEMENT.
- contract ends on specific date
- mutual cancellation
- mutual rescission and return to status quo
- substitution of a new contract between the same parties
- novation or substitution involving a new party
- and accord and satisfaction
- release
- waiver
YOUR BOSS IN THE CAR DEALERSHIP WHERE YOU WORK HANDS YOU A LETTER AND SAYS FOR YOU TO TAKE CARE OF IT. THE LETTER IS FROM JOE BLOW AND STATES THAT HE IS THE AGENT FOR THE ISTANBUHL CAR MANUFACTURING COMPANY IN TURKEY WHO HAS JUST COME OUT WITH A NEW CAR CALLED “SUPER CAR” THAT USES OXYGEN EXTRACTED BY THE CAR FROM PLAIN AIR AS ITS FUEL. THE LETTER GOES ON TO STATE THAT JOE BLOW WOULD LIKE TO SELL A LINE OF THESE “SUPER CARS” TO YOUR CAR DEALERSHIP. HOW TO YOU HANDLE IT?
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