Ch 17 Performance and discharge Conditions a Precedent something that has to happen b Subsequent a condition operates to terminate a party s absolute promise to perform c Conditions concurrent Expressed in words implied in fact implied in law use statue Discharge by performance when both parties fulfilled their duties as they ve promised Material breach non breaching party is excused from the performance of contractual duties can sue for damages resulted from breach duty to perform is not excused non breaching party must resume the performance of contractual obligations undertaken courts determines non material breach NonMaterial breach Anticipatory Repudiation before the performance is due one party may refuse to perform his Discharge by Rescission To rescind parties must make another agreement that also satisfies the legal Discharge by Novation both parties agree to substitute a 3rd party for original parties contractual obligation requirements for a contract Previous obligation all parties agree to new contract extinguish old contract new contract formed Discharge by Substituted Agreement compromise or settlement agreement Accord and Satisfaction Ling owe Frazer 8000 both parties agree Ling s car cost 8000 accord Accord is performed if Ling s car is transferred to Frazer 4 Discharge of Operation of Law Alteration of the Contract contract terms could be change w out knowledge of a party That party can discharge the contract Statues of Limitations Bankruptcy Impossibility of performance performance is impossible due to supervening events Commercial Impracticability Frustration of Purpose Temporary Impossibility Chapter 18 Breach and Remedies Damages direct losses Sale of Goods diff between contract market price Sale of Land specific performance Consequential special Damages foreseeable losses breaching party is aware it cause the injury party additional loss Case 18 1 Punitive Damage punish or deter future conduct Nominal Damages No financial loss defendant is liable but only for technical jury Mitigation of Damages when breach of contract occurs innocent injured party is held to a duty to reduce the damages he she suffered Case 18 2 Liquidated Damages a contract provides a specific amount to be paid as damages in the event of future Penalties specify a certain amount to be paid in event of default or breach Designed to penalize the Rescission A remedy where a contract is canceled parties are back to their original position be4 default or breach of contract breaching party contract Restitution both parties must return goods property or previously conveyed Rescission doesn t always call for Restitution Specific Performance promise to fulfill the contract court requires you to perform as you promised Not available remedy for personal services Case 18 Reformation Equitable remedy allows a contract to be rewritten to reflect the parties true intention It s available when agreement is expressed in writing Quasi Contract Equitable theory imposed by courts to prevent unjust enrichment Must show 1 A benefit was conferred to the other party 2 party conferring did w reasonable expectation of being paid 3 benefit was not volunteered 4 Retaining benefit w out paying result in unjust enrichment Election of Remedies Prevent double recovery Nonbreaching party must choose which remedy to sue Want land or damages UCC rejects election of remedies Waiver of Breach pattern of conduct that waives a number of successive breaches will operate as a cumulatively include all available remedies for breach of contract continued waiver Require to buy certain amount in contract Nonbreaching party can still recover damages but contract is still nto terminated GIVE NOTICE TO BREACHING PARTY THAT FULL PERFORMACE WILL BE REQUIRED IN FUTURE Exculpatory clauses excluding what happens but I am not liable Limitation of liability clauses Provisions that affect the availability of remedies Chapter 20 Formation of Sales and Lease Contracts The Uniform Commercial Code The Scope of Article 2 Does not apply to real estate unless theres a good that can be severed by the seller UCC2 doesn t apply if severed to buyer sale is the passing of title of goods to from a merchant seller buyer for a price What if Goods Services combined Pre dominant factor test Scope of Article 2A Leases Case 20 1 contract for lease of personal goods b w a lessor and a lessee Finance leases involves 3rd party supplier consumer lease less than 25 000 4 Formation of Sales and Lease Contracts at common law offer is met by unqualified acceptance binding contract is formed Offer Open terms must be definite enough for parties to ascertain its terms when it s accept Open Price Term if parties havn t agreed on pricing court can determine the reasonable price Open payment term Unless agreed payment is due on delivery COD Open delivery term Unless otherwise agreed buyer takes delivery at the sell s place of business Open Quantity courts will not impose a quantity Exceptions Requirement contract buyer agrees to purchase what buyer needs purchase Output contract buyer agrees to buy all of seller s production or output Merchant s firm offer offer could be revoked before acceptance unless theres consideration At UCC offer made by merchant in signed writing is irrevocable for a period of time No consideration necessary Acceptance any reasonable means of acceptance under the circumstances is permissible promise to ship or prompt shipment is acceptance if both parties is non merchant contract is formed according to the original offer if both parties are merchants contracts could be changed Case 20 2 Statue of Fraud sales of goods over 500 must have a signed writing to be enforceable Oral agreement enforceable after written agreement Parol Evidence terms of written agreement intended to be final expression of parties can t be disagreed by the prior agreement Unconscionability one that is so unfair and it s one sided unreasonable to enforce it courts can set it aside refuse to enforce the unconscionable provision limit the contract language and legal differences create difficulties 5 contracts for the international sale of goods Applicability of CISG international sales contracts Special provisions in International contracts choice of language choice of forum choice of law force Majeure clause
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