Presentation on theme: "Obj. 2.02 Understand terminating, transferring, and breaching a contract."— Presentation transcript:
Obj Understand terminating, transferring, and breaching a contract.
Complete o All terms have been carried out properly and completely. Time o Court will honor time request, if it is deemed of the essence. o If not mentioned in contract, then a reasonable time will be assumed.
Satisfactory o Law requires that services be completed in a satisfactory manner. o Reasonable person test Would a reasonable consider the work to done in satisfactory manner? Substantial o Slightly less than full performance Must meet the following rules: Acted in Good Faith Completed Major Components of Contract Only Minor Details Incomplete.
Tender of Performance o Tender – Offer to Perform o Must make tender even if you know the other party will not perform their part of the contact.
Mutual Release (Rescission) o Each side releases the other side from the contract. Accord and Satisfaction o Substitute one contract for another.
Death or Disability o Only allowed in Personal service contracts. o What is personal service? Photographer Artist o Any other contract must be completed.
Destruction of subject matter o If the subject matter is essential to the contract then it will be discharged. Performance becomes illegal o Any illegal contract is void.
Wrongful Alteration o Any altering or changing of a contract will discharge parties to the agreement. Statute of Limitations o Individual states have a time limit on lawsuits to be filed. o What is the only crime/tort that doesnt have a time limit?
Bankruptcy o Debtors can be discharged from contracts after filing for bankruptcy.
Assignment Delegation Novation
Legally transferring your RIGHTS in a contract. o Assignor – party who transfers the right. o Assignee – party to whom the right is transferred. No consideration needed. Must not change the obligations in the contract. Must be a RIGHT not a DUTY. Assignor is responsible for contract fulfillment.
Transfer a duty. Delegating party is still responsible for the contract being fulfilled. Contracts that CANNOT be delegated: o Promise to perform service personally. o Exercise of personal skill or judgment. o Contract prohibiting delegation.
Replacing a party to a contract with a new one. The other terms to the contract remain the same.
Wrongful failure to perform one or more promises in a contract. Anticipatory Breach o Notified that a party to the contract will not fulfill their part of the contract prior to the required time of fulfillment. o Lawsuit may be filed early in this case. Exception to the rules: Refusal to pay money owed at a future date.
Acceptance of Breach o Accept the breach of contract and discharge the other party without asking for damages. Why? Rescission and Restitution o Canceling the contract and returning anything that has been received
Money Damages o Actual – Damages DIRECTLY related to breach. o Compensatory – Award only for injuries suffered nothing more. o Consequential – Damages that DO NOT flow directly from breach. o Incidental – Reasonable expenses that INDIRECTLY from breach of contract. o Liquidated – Anticipated damages agreed prior to contract being signed. o Nominal – Award to proved legal injury but no actual damages caused. o Punitive – Damages in excess of losses suffered in order to punish party for breach. o Speculative – Damages awarded not on fact but on expectations from contract fulfillment.
Specific Performance o Ask court to order the other party to do what they agreed to do. o Subject matter must be unique in nature. o Which of the following is unique? Real Estate Stocks of General Electric 65 Ford Mustang with 44,000 miles A brand new Ford F-150 Dozen Eggs
Court order that prevents a party from performing an act. Temporary or permanent. Violators are in contempt of court.