3Discharge by Performance CompleteAll terms have been carried out properly and completely.TimeCourt will honor time request, if it is deemed “of the essence.”If not mentioned in contract, then a reasonable time will be assumed.
4Satisfactory Substantial Law requires that services be completed in a satisfactory manner.Reasonable person testWould a reasonable consider the work to done in satisfactory manner?SubstantialSlightly less than full performanceMust meet the following rules:Acted in Good FaithCompleted Major Components of ContractOnly Minor Details Incomplete.
5Tender of Performance Tender – Offer to Perform Must make tender even if you know the other party will not perform their part of the contact.
6Discharge By Agreement Mutual Release (Rescission)Each side releases the other side from the contract.Accord and SatisfactionSubstitute one contract for another.
7Discharge By Impossibility of Performance Death or DisabilityOnly allowed in Personal service contracts.What is personal service?PhotographerArtistAny other contract must be completed.
8Destruction of subject matter If the subject matter is essential to the contract then it will be discharged.Performance becomes illegalAny illegal contract is void.
9Discharge by Operation of Law Wrongful AlterationAny altering or changing of a contract will discharge parties to the agreement.Statute of LimitationsIndividual states have a time limit on lawsuits to be filed.What is the only crime/tort that doesn’t have a time limit?Murder is the only crime/tort that does not have a time limit.
10Discharge by Operation of Law BankruptcyDebtors can be discharged from contracts after filing for bankruptcy.
11Transferring a Contract AssignmentDelegationNovation
12Assignment Legally transferring your RIGHTS in a contract. Assignor – party who transfers the right.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.
13Delegation Transfer a duty. Delegating party is still responsible for the contract being fulfilled.Contracts that CANNOT be delegated:Promise to perform service personally.Exercise of personal skill or judgment.Contract prohibiting delegation.
14Novation Replacing a party to a contract with a new one. The other terms to the contract remain the same.
15Breaching a ContractWrongful failure to perform one or more promises in a contract.Anticipatory BreachNotified that a party to the contract will not fulfill their part of the contract prior to the required time of fulfillment.Lawsuit may be filed early in this case. Exception to the rules: Refusal to pay money owed at a future date.
16Remedies for Breach Acceptance of Breach Rescission and Restitution Accept the breach of contract and discharge the other party without asking for damages.Why?Rescission and RestitutionCanceling the contract and returning anything that has been receivedAcceptance for breach:Must show damages in order to win monetary damages so sometimes it may not be worth the party’s time to file lawsuit.
17Money Damages Actual – Damages DIRECTLY related to breach. Compensatory – Award only for injuries suffered nothing more.Consequential – Damages that DO NOT flow directly from breach.Incidental – Reasonable expenses that INDIRECTLY from breach of contract.Liquidated – Anticipated damages agreed prior to contract being signed.Nominal – Award to proved legal injury but no actual damages caused.Punitive – Damages in excess of losses suffered in order to punish party for breach.Speculative – Damages awarded not on fact but on expectations from contract fulfillment.
18Specific PerformanceAsk court to order the other party to do what they agreed to do.Subject matter must be unique in nature.Which of the following is unique?Real EstateStocks of General Electric’65 Ford Mustang with 44,000 milesA brand new Ford F-150Dozen EggsReal Estate and Mustang are unique.
19Injunction Court order that prevents a party from performing an act. Temporary or permanent.Violators are in contempt of court.