Chapter 6

Discharged by agreement

Discharged by agreement means that people can end a contract by mutual agreement.(This can be done by mutual release or by accord and satisfaction).

Debts and statutes of limitations

In some instances , the debt can be renewed. If a debtor makes a partial payment or admits that the debt exists after the time period has passed , the debt is renewed for another time period set by the state statute.

Innocent Misrepresentation

occurs when a person who is involved in contract negotiations says something that he or she believes to be true that turns out to be false.

Damages

payment recovered in court by a person who has suffered an injury. These damages are intended merely to recognize that a breach of contract has occurred. Lost of an amount that is less than a dollar.

Money Damages

The injured party may sue for money damages resulting from the breach of contract. The money damages should, by law, place you in the position you would have been in if the contract had been carried out.

Satisfactory in performance

The law requires that contracting services be done in a satisfactory manner. Sometimes , a contract says nothing about satisfactory ; at other times, a contract may say that the work must be done in a satisfactory manner.

Breach of contract

A breach of contract is when a person fails to perform the duties spelled out by a contract.

Discharged by impossibility of performance

A contract that becomes legally impossible to perform generally may be discharge, and both parties, may be released from the obligation.

Assignment and transfer of rights

An assignment is the transfer of a right under a contract.

Discharge by Operation of Law

At times, the best interests of society demand that a contract be terminated. Under these circumstances , the law declares contracts discharged by operation of law

Assignment of rights

Benefit

Bankruptcy

Congress has the authority to pass bankruptcy laws that set procedures for discharging a debtor's obligations. (debtor cannot be imprisoned for failure to pay). In addition, debts for taxes, alimony, child support, and maintenance are not affected by a general discharge of debts in bankruptcy.

Destruction of the exact subject matter

If the means or subject matter that is needed to perform the contract is destroyed through no fault of either party, the contract is discharged , but before it is carried out.

Discharge by performance.

Most contracts are discharged by performance. Performance is a series of activities that fulfills the purpose of a contract.

Wrongful Attention

One party's wrongful acts (such as altering or changing a contract) will discharge a contract by operation of law.

Rule of assignment and transfer of rights

Rule : People can legally transfer contract rights as long as their contract does not specifically said they cannot. The party who transfers the rights is the assignor , and the party who gets the rights is the assignee. The assignee is the third person who is not a party to the original contract.

Death or Illness in a personal service contract

The death or illness of a party to a contract may be an excuse for nonperformance . This is true only of the contract requires the personal service of the person who has died or become ill.

Time for Performance

The time for completing performance may be important to one or both of the parties. If the time for performance is not stated in a contract and there is a question of performance, the court will say that all duties under the contract must be completed in a reasonable time.

Third parties

a contract is a binding agreement that establishes a relationship between the two parties to the contract. A third person may sometimes enforce a contract when it is made specifically for that person's benefit.

Injunction

a court order that prevents a party from performing a specific act. It may be temporary or permanent. This is available only when money damages will be inadequate to compensate the injured party. One who disobeys an injunction does so under penalty of contempt of court,

Fraud

a deliberate deception intended to serve an unfair and unlawful gain.

Remedy

a legal means of enforcing a right or correcting a wrong. -You may accept the breach. -You may sue for money damages. -You may ask the court for an equitable remedy.

Reasonableness

determined by what is suitable. Fair, and proper for the goal of the contract. A reasonable time for selling a tomatoes, for instance is not the same as reasonable time for selling a house.

Novation

after the transfer of rights and assignment

Economic Duress

an act that threatens a person's income or business that makes that person enter a contract without real consent.

Undue Influence

an action or series of overly persuasive actions that make inappropriate use of one person's position of power over another person to create an agreement that is very favorable to the person with all the power.

A mutual release

an agreement between two parties to end a contract.(whatever the parties agree to do at first, they can later agree not to do to)

Unilateral Mistake

an error on the part of one of the parties to the contract. Usually a person cannot get out of a contract just because of a mistake. The rule applies to even those who cannot read English

Bilateral mistake

an error that is made on the part of both parties to the contract which is also called a mutual mistake. Usually, either one of the parties could get out of the contract.

Tender

an offer to do what you have agreed to do under a contract.

Specific Performance:

asks the court to order the other party in a contract to do what he o she agreed to do. This only happens when money damages are not sufficient to give relief and when the subject matter of the contract is rare or unique.

Punitive Damages or Rescission

money payments for damages that go beyond what the innocent party actually lost and that are designed to punish the wrongdoer

Delegation

duties

Statute of Limitations

establishes a time limit for suing in a civil case, base on the date when the breach occurred or was discovered.

Substantial performance

situation in which a party has, in good faith, completed the major requirements of a contract, leaving only a few minor details unfinished.

Duress:

the act of destroying somebody's free will by force, threat of force, or bodily harm.

Equitable Remedies

the injured party may seek an equitable remedy. Two chief equitable remedies are specific performance and an injunction

Lie Actually Relied Upon:

the innocent party has to show that he or she depended on the lie. Resulting loss is if the last element is missing.

False Representation of Fact

the law require that the lie be about a material fact that is really important.

Assignor

the party who transfer the rights

Assignee

the third person who is not a party to the original contract

Third party beneficiary

third party beneficiary may enforce a contract although they were not an original party to a contract.

Knowledge of the lie:

to be responsible for the lie, the person telling the lie must know that it is a lie.

Lie Intended to Be Relied Upon:

to prove fraud, the innocent person must show that the liar told the lie knowing that the other party, would hear it, believe it, and act upon it. The lie was told to tempt the other party into a false contract.

Delegation

transferring of a duty under a contract.(only the original party can be sued)

Physical Duress

when actual physical force is used to cause another person to enter a contract, the contract is void.