BCOR 3000 1nd Edition Lecture 17 Outline of Last Lecture I What is a Third Party II Involvement After Formation III Assignment and Delegation IV Limits on Delegation V Limits on Assigning Rights VI 3rd Party Beneficiaries Outline of Current Lecture I Discharge of Duties II Discharge by agreement of Parties A Mutual Rescission B Novation C Substituted Contract D Accord and Satisfaction III Discharge Impossibility IV Subjective Impossibility Current Lecture Discharge of Duties Means party has done all that is needed under the contract Most often by doing what contract requires performance But many other circumstances Effect In some cases duties can be discharged even though not fully performed CAN DO It s have you done everything you can do can be discharged Ex Blizzard of 2006 there were no final exams discharged b c the students did what they could do These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute What do we mean about discharge Has the person done everything that they need to do Or they have done everything they CAN DO Ex Required to rake leaves but b c of a large snow storm it would be impossible to finish the contract therefore the raking of leaves is discharged and they raker has done all they CAN DO Discharge by agreement of the Parties Mutual Rescission Both have to agree to call off the deal Where the parties have formed a contract and decide not to do it both agree The decision has to occur together Rescission is the legal un doing of the contract Restitution can come into play here as well but not always fully or partially Novation Replace one party Innovate something new Replacing someone new into the contract The duties of the 1st person is discharged Ex Paint someone s house Delegate to brother Brother owes money to older brother so he paints the house accepts delegation For whatever reason the older brother is still responsible for the output However if there is a novation the older brother s duties are discharged and given to his brother All 3 people must sign the novation and in the novation it must say that the older brother is fully discharged released of all responsibilities and duties Have to be fully released from duties for it to be a novation If not released it is not a novation and you are still held responsible for all duties Substituted contract we ll do this instead The new contract immediately discharges duties of 1st contract Ex Ordering food at a restaurant Waiter writes it down But some one orders something better so you change your mind to another entr e Ex Married with 3 kids with a Mazda Talk with wife about getting a bigger car Goes to dealership to test drive different cars Buys a MIADA and tells wife Does not approve of purchase Goes back to auto dealer to switch cars Asks dealer to swap the cars and they say yes The minute that the contract is formed for the Mazda and not the Mirada the contract for the Mirada are discharged and cannot sue under that contract If substituted contract the originally contract is dead immediately Accord and Satisfaction New agreement to replace old Key in settlement of dispute over old agreement Discharge of duties in old contract does not occur until new agreement is performed If accord not performed can sue on either original or accord The reason for the 2nd contract is not just b c of changing of your mind but b c of a problem with the first contract Ex Get a new car and after driving it a few weeks you notice that there is a problem Take it to dealer to get it fixed but can t seem to fix the problem Dealer says pick out any CX9 and you can have that one instead Leave the old car there and drive home the 2 nd CX9 The 2nd CX9 has more problems than the first You decide that you want to have the 1 st CX9 Because the 2nd car underperformed the buyer can go back to get the other car 1st CX9 because the accord was not satisfied Both contracts stay open until the accord is satisfied Once there is satisfaction then the previous duties are discharged Discharge Impossibility If the duties can still be carried out then usually there is no discharge There are more exceptions to discharge Death of promisor of personal service contract Destruction of subject matter Supervening Illegality Death of promissee Sometimes depends on the duty and all other circumstances Ex Person dies while you are working on a tax return Even with death you must finish the tax return b c it is required by the IRS Ex Contract to paint house The homeowner dies all duties are discharged B c homeowner is dead and have no idea what is going to happen with the house or future owner Does not make sense to compete tasks Change it If the house is of the way done then you need to finish the house and your responsibilities cannot be discharged Subjective Impossibility Not impossible but b c of difficulty you are discharged Must be due to unforeseeable circumstances Commercial Impracticability Make contract and set terms But if something unforeseeable causes a problem within a contract and makes the performance of the obligations impossibly or very difficult then become discharged from responsibilities Makes it so contract is extremely burdensome to perform Price change usually not enough Frustration of Purpose No harder to perform but no longer makes sense Usually dealing with the recipient of the service b c something has changed and it doesn t make sense due to unforeseeable circumstances Ex Have a contract with a limo service to be driven from the millennium hotel to Folsom field But b c the game was moved to Denver you do not stay at the millennium and stay in downtown Denver The limo driver requires payment b c of a contract with him The people who were going to the game are not held to the charges of the service b c of unforeseeable circumstances and b c it no longer makes sense to use that service Know how to distinguish these two