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August 9, 2002BUSINESS LAW (Ms. Hawkins)1 Chapter 11 covers contractual obligations and their enforcement. 11-1 Transfer and discharge of obligations 11-2.

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Presentation on theme: "August 9, 2002BUSINESS LAW (Ms. Hawkins)1 Chapter 11 covers contractual obligations and their enforcement. 11-1 Transfer and discharge of obligations 11-2."— Presentation transcript:

1 August 9, 2002BUSINESS LAW (Ms. Hawkins)1 Chapter 11 covers contractual obligations and their enforcement Transfer and discharge of obligations 11-2 Remedies of Breach of Contract 11-3 The Marriage Contract and Divorce CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

2 August 9, 2002BUSINESS LAW (Ms. Hawkins)2 Chapter 11 concludes our unit on contracts with a discussion of how contractual obligations are transferred and fulfilled, types of remedies, and finally practical application of contract principles with respect to marriage and principles Transfer and discharge of obligations 11-2 Remedies of Breach of Contract 11-3 The Marriage Contract and Divorce CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

3 August 9, 2002BUSINESS LAW (Ms. Hawkins)3 The Transfer of Contract Rights and Duties We will look at the following topics: Assignable Rights Non-assignable Rights Form of Assignments Notice of Assignments Delegation of Contractual Duties CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

4 August 9, 2002BUSINESS LAW (Ms. Hawkins)4 The Transfer of Contract Rights and Duties A transfer of a right a party may have under a contract to another is called an assignment. The party who transfers the contractual right is the assignor and the recipient is the assignee. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

5 August 9, 2002BUSINESS LAW (Ms. Hawkins)5 Whats Your Verdict (Page 189) Whipple bought a high-powered sports coupe from Upscale Motors for $32,000. After a down payment of $2,000, the balance, plus a finance charge, was to be paid by mail in installments over the following 48 months. Upscale Motors needed cash to restore its inventory of new cars. It immediately sold Whipples contract to a finance company, Palmout Inc., and told Whipple to mail all installment payments to Palmout. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

6 August 9, 2002BUSINESS LAW (Ms. Hawkins)6 Whats Your Verdict (Page 189) Is such a transfer of contract rights legal? Yes. When Whipple was notified of the assignment, he became obligated to pay the finance company instead of Upscale Motors. The assignee receives exactly the same contractual rights and duties as the assignor. The person who owes a duty under the contract (Whipple) is called the obligor. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

7 August 9, 2002BUSINESS LAW (Ms. Hawkins)7 Assignable Rights A party may assign contractual rights to another, provided the performance will not be materially changed. Performance is the fulfillment of contractual promises as agreed. An example is when retailers assign to issuers of credit cards the right to collect the amounts due from customers who use the cards. In exchange, the credit card companies immediately pay the retailers the face amount of the credit slips, less an agreed percentage. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

8 August 9, 2002BUSINESS LAW (Ms. Hawkins)8 Non-assignable Rights A right created under a contract that prohibits transfer of the contractual rights. Examples include: Claims for damages for personal injuries Claims against the United States Rights to personal service, especially those of a skilled nature, or when personal trust and confidence are involved Assignments of future wages as limited by state statutes CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

9 August 9, 2002BUSINESS LAW (Ms. Hawkins)9 Form of Assignments An assignment is valid whether written or oral. Some state statutes require that some assignments be written. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

10 August 9, 2002BUSINESS LAW (Ms. Hawkins)10 Notice of Assignments The obligor must pay the assignee after notification. The assignee should promptly notify the obligor of the assignment. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

11 August 9, 2002BUSINESS LAW (Ms. Hawkins)11 Delegation of Contractual Duties A person who delegates contractual duties remains legally obligated and responsible for proper performance under the contract, even though someone else may so the required work. A person cannot delegate to another any duty where performance requires unique personal skill or special qualifications. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

12 August 9, 2002BUSINESS LAW (Ms. Hawkins)12 Delegation of Contractual Duties vs. Assignment (What s the Difference?) Assignment is transfer of contractual rights. Delegation is where someone other than the original contractor complies with the duties or provides the required services. BUT, the original contractor is still responsible for satisfactory performance to the holder of the contractual rights. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

13 August 9, 2002BUSINESS LAW (Ms. Hawkins)13 Discharge of Contractual Obligations By Performance By the Initial Terms By Subsequent Agreement By Impossibility of Performance By Operation of Law By Tender of Performance CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

14 August 9, 2002BUSINESS LAW (Ms. Hawkins)14 Discharge of Contractual Obligations By Performance... Most contracts are discharged by complete performance of the terms of the contract; else, courts would collapse. Failure to provide complete performance is breach of contract. When almost all of the duties are performed, except for a minor duty, substantial performance has occurred. Failure to perform is a default. Notification that you will not perform before the contractual time of performance is anticipatory breach. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

15 August 9, 2002BUSINESS LAW (Ms. Hawkins)15 Discharge of Contractual Obligations By the Initial Terms... Termination on a specific date or upon expiration of a specified period of time Termination upon the occurrence of a specified event (e.g. mowing the yard until your return from vacation) Termination upon the failure of a certain event to happen (e.g. construction loan contract upon failure to get a required building permit) CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

16 August 9, 2002BUSINESS LAW (Ms. Hawkins)16 Discharge of Contractual Obligations By Subsequent Agreement... The parties to an agreement may mutually agree to change the terms or nature of their relationship. Rescission: agreement to undo the entire contract Accord and Satisfaction: replace entire contract with a new one Novation: release of a party from performance and acceptance of a substitute party CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

17 August 9, 2002BUSINESS LAW (Ms. Hawkins)17 Discharge of Contractual Obligations By Impossibility of Performance... External conditions could prevent performancewar or embargo. Unique subject matter is destroyed (e.g. burned Picasso) Performance becomes illegal (e.g. installing asbestos) Death/disability of the person to perform a service CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

18 August 9, 2002BUSINESS LAW (Ms. Hawkins)18 Discharge of Contractual Obligations By Operation of Law... A contract may be discharged or the right to enforce it may be barred by operation of the law (e.g. debts discharged in bankruptcy free the obligor from creditors). Alteration (material change in the terms) can discharge the contract under these conditions: A material change has occurred Alteration is made intentionally Alteration is made by a party to the agreement Alteration is made without consent of the other party CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

19 August 9, 2002BUSINESS LAW (Ms. Hawkins)19 Discharge of Contractual Obligations By Tender of Performance... A ready, willing, and able offer to perform an obligation is a tender. A tender that is made in good faith but is rejected will discharge the obligation of the one offering to perform. A tender of only part of the debt is not a valid tender. If the debtor offers less than the amount due, the creditor may refuse it without losing the right to later collect the entire amount due. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

20 August 9, 2002BUSINESS LAW (Ms. Hawkins)20 Remedies Possible for Breach Remedies (general)... A remedy means the action or procedure followed to enforce a right or to get damages for an injury to a right. A tender that is made in good faith but is rejected will discharge the obligation of the one offering to perform. A tender of only part of the debt is not a valid tender. If the debtor offers less than the amount due, the creditor may refuse it without losing the right to later collect the entire amount due. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

21 August 9, 2002BUSINESS LAW (Ms. Hawkins)21 Remedies Possible for Breach Remedy for a Minor Breach The only remedy available for a minor breach is money damages. The injured party must continue performing the duties under the contract. The primary guideline in determining if a breach is minor or major is the significance of the breach in relation to the entire contract. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

22 August 9, 2002BUSINESS LAW (Ms. Hawkins)22 Remedies Possible for Breach Remedy for a Major Breach There are 3 remedies available: 1. Rescission & Restitution, 2. Money Damages 3. Specific Performance. The injured party does not have to continue performing the duties under the contract. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

23 August 9, 2002BUSINESS LAW (Ms. Hawkins)23 Remedies Possible for Breach Remedy for a Major Breach Rescission & Restitution : Parties are placed in the same legal position that they were in before contracting. Rescission allows the parties to treat the contract as cancelled. Restitution permits the injured party to recover money or property given to the defaulting party. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

24 August 9, 2002BUSINESS LAW (Ms. Hawkins)24 Remedies Possible for Breach Remedy for a Major Breach Money Damages (5 types): Compensatory: Parties are placed in the same financial position that they were in absent a breach. Consequential: Parties are placed in the same financial position, if the contract had been performed. Punitive: In cases of fraud or intentional tort, the intent is to punish and make an example of the defendant. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

25 August 9, 2002BUSINESS LAW (Ms. Hawkins)25 Remedies Possible for Breach Remedy for a Major Breach Money Damages (5 types): Liquidated: Parties to a contract may agree that a certain amount of money will be paid if a certain breach occurs; the amount cannot be excessive in relation to the injury. Nominal: In cases where no substantial harm is done, courts may award a token amount. This is because failure to perform a contractual duty is a legal wrong. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

26 August 9, 2002BUSINESS LAW (Ms. Hawkins)26 Remedies Possible for Breach Remedy for a Major Breach Specific Performance: Sometimes the only appropriate remedy for breach of contract is to order that the breaching party do exactly what was required under the contract. Courts are reluctant to grant specific performance In cases where they would have great difficulty in supervising the result (e.g., home construction). CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

27 August 9, 2002BUSINESS LAW (Ms. Hawkins)27 Remedies Possible for Breach Remedy for a Major Breach Whats Your Verdict? (Page 194) Liu contracted to buy 16 acres of land from McCall. She planned to build an amusement park on the land that was near the junction of two interstates and had adequate utilities and population density. When McCall learned of her plan, he refused to transfer the title. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

28 August 9, 2002BUSINESS LAW (Ms. Hawkins)28 Remedies Possible for Breach Remedy for a Major Breach Whats Your Verdict? (Page 194) What is the optimal remedy for Liu? Liu could likely win a suit for specific performance. The court would order McCall to transfer title to the property with a properly signed deed delivered to Liu. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

29 August 9, 2002BUSINESS LAW (Ms. Hawkins)29 Remedies Possible for Breach Factors Affecting Choice of Remedy We will discuss the following topics: Conflict of Remedies Duty to Mitigate Waivers Statute of Limitations Bankruptcy CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

30 August 9, 2002BUSINESS LAW (Ms. Hawkins)30 Remedies Possible for Breach Factors Affecting Choice of Remedy Conflict of Remedies: Injured parties must choose a remedy; often, electing to pursue one remedy will rule out pursuing another. For example restitution and specific performance are essentially opposites, so you could not combine these remedies. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

31 August 9, 2002BUSINESS LAW (Ms. Hawkins)31 Remedies Possible for Breach Factors Affecting Choice of Remedy Conflict of Remedies: Whats our Verdict? (Page 196) Jim high and tight Brushback, an unknown baseball pitcher, signed a two-year contract to play for a major league team for $120,000 a year. After two months, Brushback had won all four games hed started with 37 strikeouts and an earned-run average (ERA) of He then contracted with a competing team for $12 million a year, thereby breaching his contract. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

32 August 9, 2002BUSINESS LAW (Ms. Hawkins)32 Remedies Possible for Breach Factors Affecting Choice of Remedy Conflict of Remedies: Whats our Verdict? (Page 196) What remedies are available to the original team? The original team could recover two months wages ($20,000) as restitution. However, if the team elects this remedy, they would lose the ability to sue for damages and the ability to obtain an injunction to stop Brushback from playing for the other team. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

33 August 9, 2002BUSINESS LAW (Ms. Hawkins)33 Remedies Possible for Breach Factors Affecting Choice of Remedy Duty to Mitigate: A party injured by a breach of contract is required by law to take reasonable steps to minimize the harm done. For example, in most states a landlord must take reasonable steps to re-rent an apartment vacated in breach of a lease. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

34 August 9, 2002BUSINESS LAW (Ms. Hawkins)34 Remedies Possible for Breach Factors Affecting Choice of Remedy Waivers: Sometimes a party intentionally and explicitly gives up a contractual right. For example, if a creditor accepts a late payment without a late charge, this is a waiver. If the debtor consistently sends late payments that are accepted, the right to collect a late fee specified in the contract on future payments may be waived. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

35 August 9, 2002BUSINESS LAW (Ms. Hawkins)35 Remedies Possible for Breach Factors Affecting Choice of Remedy Statute of Limitations: Statutes in all states deny any remedy if suit is not brought within a certain time after a legal claim, such as breach of contract, arises. The clock starts ticking from the moment there is a right to sue. A minor is given a reasonable time after reaching majority to file suit. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

36 August 9, 2002BUSINESS LAW (Ms. Hawkins)36 Remedies Possible for Breach Factors Affecting Choice of Remedy Bankruptcy: Bankruptcy s a legal proceeding whereby a debtors assets are distributed among creditors to discharge the debtors debts Under the U.S. Constitution, Congress has established uniform laws on bankruptcies that permit the discharge (excusing) of debts. Debtors get a fresh start and creditors share fairly in whatever assets are left. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

37 August 9, 2002BUSINESS LAW (Ms. Hawkins)37 The Marriage Contract and Divorce Marriage and Contracts Marriage is a legal union of a man and woman as husband and wife. Typically, the minimum age for marriage without parental consent is 18. Some states restrict marriage between close relatives. Some states have tried to restrict marriage between parties of different races (Loving v. Virginia, 1967) CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

38 August 9, 2002BUSINESS LAW (Ms. Hawkins)38 The Marriage Contract and Divorce Marriage and Contracts Loving v. Virginia (1967) Rule of Law: A state may not restrict marriages between persons solely on the basis of race under the Equal Protection and Due Process Clauses of the Fourteenth Amendment. It is simply not possible for a state law to be valid under our Constitution which makes the criminality of an act depend on the race of the actor (U. S. Supreme Court)." CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

39 August 9, 2002BUSINESS LAW (Ms. Hawkins)39 Is consensual premarital intercourse a crime? Criminal laws against this have generally been eliminated over the past couple of decades. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT The Marriage Contract and Divorce

40 August 9, 2002BUSINESS LAW (Ms. Hawkins)40 What does Georgia law say about consensual premarital intercourse? It had been a crime since In 2003 the Georgia Supreme Court abolished a 170 year old law prohibiting sexual relations outside of marriage. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT The Marriage Contract and Divorce

41 August 9, 2002BUSINESS LAW (Ms. Hawkins)41 Is there a minimum legal age for dating? No. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT The Marriage Contract and Divorce

42 August 9, 2002BUSINESS LAW (Ms. Hawkins)42 The Marriage Contract and Divorce Marriage and Contracts Whats Your Verdict? (Page 199) Jim and Mary are both 16 years old. While dating they have intimate relations, and Mary becomes pregnant. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

43 August 9, 2002BUSINESS LAW (Ms. Hawkins)43 Marriage and Contracts Whats Your Verdict? (Page 199) Will the law compel Jim and Mary to get married? No law exists to force parents of an illegitimate child to marry. The law does however does require the responsible identified male parent to pay medical bills related to the pregnancy and child support. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT The Marriage Contract and Divorce

44 August 9, 2002BUSINESS LAW (Ms. Hawkins)44 The Marriage Contract and Divorce Marriage and Contracts We will cover these topics: Contractual Elements of Premarital Relationships Contractual elements of Marital Relationships Common-Law Marriage CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

45 August 9, 2002BUSINESS LAW (Ms. Hawkins)45 The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Premarital Relationships: If one party in a heterosexual relationship proposes marriage and the other accepts, a binding contract results. If both later mutually agree to end their engagement, the law considers their agreement void and never to have existed. If only one party wants out, a breach-of-promise suit may be brought by the other party. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

46 August 9, 2002BUSINESS LAW (Ms. Hawkins)46 The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Premarital Relationships: If one party in a heterosexual relationship proposes marriage and the other accepts, a binding contract results. If both later mutually agree to end their engagement, the law considers their agreement void and never to have existed. If only one party wants out, a breach-of-promise suit may be brought by the other party. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

47 August 9, 2002BUSINESS LAW (Ms. Hawkins)47 CHAPTER 18: MARRIAGE & DIVORCE How do courts handle breach of promise suits? Courts will generally not enforce a breach of contract to marry, and any lawsuit based on such a breach should be thrown out … unless there are other, more viable allegations involved (pregnancy). Lawsuits based on breach of contract to marry used to be allowed under common law, but are now banned by statute in most states. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

48 August 9, 2002BUSINESS LAW (Ms. Hawkins)48 CHAPTER 18: MARRIAGE & DIVORCE Will damages be awarded if a third party interferes with an engagement? Some states allow for damages, EXCEPT against parents. Does the ring have to be returned if the marriage is called off? Yes, depending on the state. The recipient can keep gifts other than those given in expectation of marriage. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

49 August 9, 2002BUSINESS LAW (Ms. Hawkins)49 CHAPTER 18: MARRIAGE & DIVORCE The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Premarital Relationships: Statutory Requirements (How Do I Get Married?) Follow the laws of the state you marry in. Apply and pay for a marriage license ($65 in Georgia). Take blood test to check for communicable diseases (Not as of 7/1/03). A waiting period of 3 days between application and issuance is common (no waiting in Georgia). Court clerks, mayors, judges, rabbis, ministers, priests, and ship captains can perform the ceremony. / CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

50 August 9, 2002BUSINESS LAW (Ms. Hawkins)50 CHAPTER 18: MARRIAGE & DIVORCE U. S. Marriage Statistics Sex Men Women Median age for first time marriages CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

51 August 9, 2002BUSINESS LAW (Ms. Hawkins)51 CHAPTER 18: MARRIAGE & DIVORCE Minimum age for marriage with and without parental consent? State Age with Parental Consent Age Without Parental Consent Alabama1418 CaliforniaNo age limit18 Georgia1618 CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

52 August 9, 2002BUSINESS LAW (Ms. Hawkins)52 CHAPTER 18: MARRIAGE & DIVORCE Minimum age for marriage with and without parental consent? State Age with Parental Consent Age Without Parental Consent MA and KS14 M; 12 F18 Texas1418 Puerto Rico18 M; 16 F21 CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

53 August 9, 2002BUSINESS LAW (Ms. Hawkins)53 The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Marital Relationships: Marital Consortium is the practical and legally recognized purposes for marriage to include procreation, raising children, and filling sexual, economic, and companionship needs. It is possible to sue for loss of consortium. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

54 August 9, 2002BUSINESS LAW (Ms. Hawkins)54 The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Marital Relationships: Rights and Duties of Parenthood Parents are obligated by state laws to support their children until they reach adulthood. Adoptive parents have the same rights and duties as biological parents. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

55 August 9, 2002BUSINESS LAW (Ms. Hawkins)55 The Marriage Contract and Divorce Marriage and Contracts Contractual Elements of Marital Relationships: Property Rights and Duties Property acquired during the marriage may be kept in the name of the husband, the wife, or both. Keeping a spouse from getting property rights can be accomplished with a prenuptial agreement. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

56 August 9, 2002BUSINESS LAW (Ms. Hawkins)56 The Marriage Contract and Divorce Marriage and Contracts Common-Law Marriage Common-law marriages have their roots in the frontier due to absence of legal methods to become man and wife. Today about one-fourth of our states fully allow common-law marriage. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

57 August 9, 2002BUSINESS LAW (Ms. Hawkins)57 The Marriage Contract and Divorce Marriage and Contracts Common-Law Marriage In the state of Georgia, a marriage can have common law status if created before 1/1/97. If a couple is in a common law marriage, is a legal divorce necessary for dissolution of this union? Yes. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

58 August 9, 2002BUSINESS LAW (Ms. Hawkins)58 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: By Annulment By Divorce Separation No-Fault Divorce Typical Issues in a Divorce CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

59 August 9, 2002BUSINESS LAW (Ms. Hawkins)59 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: Annulment An annulment is a court order that cancels a marriage because of a problem that existed from the beginning of the marriage. Annulments end marriage considered to be void or voidable. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

60 August 9, 2002BUSINESS LAW (Ms. Hawkins)60 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: Annulment Voidable marriages can be the result of refusal to have children, or fraudulent grounds for the marriage contract. Fraud includes lying about wealth, condition of pregnancy, freedom from disease, past marriage, concealment (addictions, felony convictions), or age. A void marriage occurs when laws are violated (e.g., bigamy). CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

61 August 9, 2002BUSINESS LAW (Ms. Hawkins)61 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: Divorce Divorce is the usual method used to end marriage (also called dissolution). Divorce is a court action that terminates the marriage and divides property and remaining responsibilities. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

62 August 9, 2002BUSINESS LAW (Ms. Hawkins)62 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: Divorce In many states the first step toward divorce is separation. If parties fail to reconcile during the period of separation, the separation agreement will often become the basis for the final divorce decree. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

63 August 9, 2002BUSINESS LAW (Ms. Hawkins)63 The Marriage Contract and Divorce Ending the Marriage Contract We will discuss these topics: Divorce In a no-fault divorce, there is no assignment of fault. Both spouses agree that "irreconcilable differences" have arisen. Neither time nor counseling will save the marriage; it simply will not work. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

64 August 9, 2002BUSINESS LAW (Ms. Hawkins)64 CHAPTER 18: MARRIAGE & DIVORCE No-Fault Divorce a Whats Your Verdict? (Page 270) Jerry and June married when they were very young. As the years passed, they grew apart. June wanted a divorce so she could move on with her life. However, she did not have any real grounds for requesting one. Jerry had not been abusive, cruel, adulterous, or deserting. June had just grown tired of living with him. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

65 August 9, 2002BUSINESS LAW (Ms. Hawkins)65 CHAPTER 18: MARRIAGE & DIVORCE No-Fault Divorce Whats Your Verdict? (Page 270) Can June still get a divorce? She could get a divorce even though there were no possible grounds for it other than being bored with Jerry. She can initiate a no-fault dissolution based on irreconcilable differences. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

66 August 9, 2002BUSINESS LAW (Ms. Hawkins)66 CHAPTER 18: MARRIAGE & DIVORCE Grounds for At Fault Divorce Cruelty Desertion Adultery Confinement in Prison Physical Inability to Engage in Sex (if not disclosed prior to marriage) CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

67 August 9, 2002BUSINESS LAW (Ms. Hawkins)67 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Typical Issues: Division of Property Child Custody Child Support Visitation Alimony (support paid by wage earner) CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

68 August 9, 2002BUSINESS LAW (Ms. Hawkins)68 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Division of Property In most states, the property brought into the marriage by a spouse will remain that spouses property. The exception is community property states (e.g., California) CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

69 August 9, 2002BUSINESS LAW (Ms. Hawkins)69 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Child Custody Under the Marriage and Divorce Act, the court usually considers such factors as: parents wishes childs wishes childs relationship with parents childs adjustment to the home physical and mental health of all parties CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

70 August 9, 2002BUSINESS LAW (Ms. Hawkins)70 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Child Support This is the monetary payment by a parent to provide a dependent child with appropriate economic maintenance. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

71 August 9, 2002BUSINESS LAW (Ms. Hawkins)71 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Visitation This is not related to child support. One cannot block court ordered visitation due to non-payment of child support. CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

72 August 9, 2002BUSINESS LAW (Ms. Hawkins)72 CHAPTER 18: MARRIAGE & DIVORCE Divorce Issues to be Resolved Alimony This is the support pad by the wage earner of the family to the other spouse. It may be paid at regular intervals or in lump sum. Factors considered are the paying spouses income, number of dependents, earnings outlook, current debts, and number of spouses (former and subsequent). CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

73 August 9, 2002BUSINESS LAW (Ms. Hawkins)73 CHAPTER 18: MARRIAGE & DIVORCE CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT

74 August 9, 2002BUSINESS LAW (Ms. Hawkins)74 CHAPTER 18: MARRIAGE & DIVORCE The End! CHAPTER 11: CONTRACTUAL OBLIGATIONS & ENFORCEMENT


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