week 5 notes Flashcards
privity of contract
A contract cannot confer rights or impose obligations on any person other than the parties to the contact
seal
If third party receives promise of benefit under seal, can enforce promise even where no privity and no consideration
constructive trust
A constructive trust is a legal remedy that gives someone an equitable interest in property that was wrongfully obtained or held by another person; hold legal title to property for the benefit of another person
insurance & privity
Insurance legislation prohibits using the doctrine of privity
Insurance contracts also contain rights of subrogation
novation
mutual agreement to change terms or change parties
Elements of novation
New debtor assumes complete liability
Creditor must accept new debtor as principal debtor, not as agent or guarantor
Creditor must accept new contract in full substitution of former
force majeure
legal term that refers to an event that prevents someone from fulfilling their obligations, and a clause that protects parties from liability in such a situation (floods, hurricanes, riots, strikes)
frustration
Where an event or occurrence outside the control or fault of the parties renders the contract impossible to perform (employee becomes disabled, serious injury, force majeure)
no frustration if:
Reason for non-performance is that performance is simply more expensive than planned
Impossibility of performance is due to some fault of the promisor in order to avoid contract
waiver
each party agrees to abandon rights
Restitutio ad integrum
Restitutio in integrum is a Latin phrase that means “restoration to the original position” or “full restitution”. It’s used in Roman and civil law, and in modern times in a variety of legal contexts
Duty to mitigate
Injured party must mitigate or minimize its loss
Failure to mitigate - party may lose right to full recovery
Mitigate - to do what is reasonable in the normal course of business
Specific performance
party is compelled to complete the contract as agreed, i.e. transfer particular property, perform particular service, etc.
Injunction
prohibitory to restrain party from doing something
quantum meruit
“what one has earned” or “as much as one deserves”. It’s a legal concept used to recover payment for services that were provided but not compensated for.
