Business Law - Chapter 9.txt
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the transfer of rights under a contract to a third party.
What right does an assignee have
the right to demand performance from the other original party to the contract
When can rights not be assigned?
- statute expressly prohibits assignment
- The contract is for personal services
- the assignment will materially alter the obligor's risk or duties
- the contract prohibits assignment
the transfer of duties under a contract to a third party, who then assumes the obligation of performance the contractual duties previously held by the one making the delegation
When can duties not be delegated
- performance depends on the obligor's personal skills or talents, or special trust has been placed in the obligor
- performance by a third party will vary materially from that expected by the obligee
- the contract prohibits delegation
if the delegatee fails to perform, is the delegator still liable to the obligee?
What does an assignment of all rights or an assignment of the contracts mean
both the rights and the duties arise under the contract are transferred to a third party
what is a third party beneficiary contract?
one made for the purpose of benefiting a third party
what are the two types of beneficiaries?
- Intended Beneficiary: One for whose benefit a contract is created
- Incidental Beneficiary: a third party who indirectly benefits from a contract but for whose benefit the contract was specifically intended.
What rights do intended beneficiary and incidental beneficiary have?
- intended beneficiary can sue the promisor directly
- incidental beneficiaries have no rights to the benefits received and cannot sue to have the contract enforced
contract obligations may be subject to what types of conditions
- condition precedent: a condition that must be fulfilled before a party's promise becomes absolute
- conditions subsequent: a condition that, if it occurs, operates to terminate a party's absolute promise to perform
- concurrent conditions: conditions that must be performed simultaneously. Each party's absolute duty to perform is conditioned on the other party's absolute duty to perform
What are ways a contract can be discharged by performance
complete or substantial performance
What are ways a contract can be discharged by agreement
- rescission: the parties mutually agree to rescind the contract
- novation: a new party is substituted for one of the primary parties to a contract, and a new contract is formed
- accord and satisfaction: the parties agree to render and accept performance different from that on which they originally agree
What are ways a contract can be discharged by operation of law
- Material alteration
- statute of limitation
- impossibility of performance
- impracticability of performance
- frustration of purpose
what are the different types of damages for a breach of contract
- Compensatory damages
- Consequential damages
- Punitive damages
- Nominal damages
- Liquidated damages
Define compensatory damages
damages that compensate the nonbreaching party for injuries actually sustained and proved to have arisen directly form the loss of the bargain resulting from the breach of contract
how to measure compensatory damages for a breach in contract for the sale of goods and lands
contract price and the market price
how to measure compensatory damages from a breach in a construction contract
depends on which party breaches and at what stage of construction the breach occurs
Define consequential damages
Damages that result from special circumstances beyond the contract itself
how can someone recover consequential damages
- foreseeable result of a breach of contract
- the breaching party knew at the time of the contract that special circumstances existed
Define Punitive damages
- Damages awarded to punish the breaching party
- not awarded in an action for breach of contract unless a tort is involved
Define Nominal Damages
- damages small in amount that are awarded when a breach has occurred but no actual injury has been suffered.
- only to establish that the defendant acted wronfully
define liquidated damages
damages that may be specified in a contract as the amount to be paid to the nonbreaching party in the event the contract is breached
Define Recission of a contract
A remedy whereby a contract is canceled and the parties are restored to the original position that they occupied prior to the transaction
what are the requirements for a recission to be issued
Fraud, mistake, duress, failure of consideration is present
Define Restitution and when does it occur
when a contract is rescinded, both parties must make restitution to each other by returning the goods, property, or funds previously conveyed.
what does restitution prevent
unjust enrichment by either parties
When is special performances granted
- contracts for the sale of goods or land
- when monetary damages would be an inadequate remedy
Define reformation and when it can be used
- equitable remedy
- allowing a contract to be reformed or rewritten to reflect the parties true intentions
- when an agreement is imperfectly expressed in writing
What must a party prove to obtain an equitable remedy from a quasi contract
- a benefit was conferred on the other party
- the party conferring(grant) the benefit did so with the expectation of being paid
- the benefit was not volunteered
- the party receiving the benefits would be unjustly enriched if allowed to retain the benefit without paying for it.
can a contract limit remedies on a breached contract?
- yes, a contract may provide that no damages can be recovered in the event the contract is breached
- UCC remedies:
- - 4 year statute of limitation, cannot be less than 1 year, or more than 4
- - contract state that a remedy is exclusive = sole remedy
- - limit consequential damages, unless unconscionable
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