Business Law; Chapter 6: How Contracts Come to an End; 6.1: Transferring and Ending Contracts
Satisfactory Performance
The law requires that contractual services be done in a satisfactory manner. If one party believes the work was done in an unsatisfactory manner then it can end up in court. The court uses the reasonableness test to measure whether the contract was performed in a satisfactory manner.
What rights may be assigned
most personal services can't be assigned. May be assigned unless the assignment changes the obligations of the other party to the contract in an important way.
How rights may be assigned
no consideration needed for validation (best to put in writing)
Accord and Satisfaction
one party agrees to accept a different performance from the other party. One contract is SUBSTITUTED for another.
Wrongful alteration
one party's wrongful acts (like altering/changing a contract)will discharge a contract by operation of law
Discharge by agreement
people can end a contract by mutual agreement (can be done by mutual agreement or by accord and satisfaction)
third party beneficiary
person who isn't a party to a contract but stills benefits from the contract
Involuntary Discharge
(impossibility of performance and by operation of law) Some contracts are discharged involuntarily despite what the parties intended to do. In these situations, obligations under the contract may also expire.
What may NOT delegate in the following situations
1. a party agrees to perform the service 2. the contract calls for the exercise of personal skill and judgement 3. the contract itself prohibits delegation
Time for Performance
If there is no time limit, then the duty has to be done in a reasonable time
Discharge by Performance
Most contracts are discharged by performing the actions
Novation
No need of permission of the other party to assign contract rights or to delegate duties to
Time is of the Essence
To avoid any kind of misunderstanding about the time, the time limit should be included in the contract along these words
Performance
a series of activities that fulfills the purpose of a contract
Substantial Perfomance
a situation in which a party has, in good faith, completed the major requirements of a contract, leaving only a few minor details unfinished.
privity of contract
determines who can sue whom over a question of performance required by a contract
Mutual release
an agreement between to parties to end a contract
Tender of Payment
an offer to pay a certain amount to fulfill a contract
Bankruptcy
can't be jailed for it. Suing isn't allowed in loans. Can't discharge loans for taxes, child defenses or education.
Reasonableness
determined by what is suitable, fair, and proper to the goal of the contract
Stature of limitations
establishes a time limit for suing in a civil case, based on the date when the breach occurred or was discovered.
Destruction of 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. Must occur after entering contract but before it's carried out
Tender
is an offer to do what you have agreed to do under a contract. If neither party has made a tender then neither party can bring a lawsuit against the other (doesn't apply to debts)
Discharge by impossibility of performance
may be allowed in case of death or illnesses that prevents the performance of a personal service contract; the destruction of the exact subject matter, or the means for performance; and illegality, or situations in which the performance of a contract becomes illegal
Debt and statute of limitations
some instances-debt may 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.
third parties
sometime enforces a contract when it's specifically for that person's benefit
Discharge by operation of Law
the best interests of society demand that a contract be terminated. Under these circumstances, the law declares contracts by operation of law
Reasonableness Test
the court asks whether a reasonable person would believe that the job was completed in a satisfactory manner.
Death or illness in a personal service contract
the death or illness of a party to a contract may be an excuse for nonperformance
Assignor
the party who transfers the right
assignee
the third party who gets the rights
Assignment
the transfer of a right under a contract
Delegation
transferring of a duty under a contract
Breach of Contract
when a person fails to perform the duties spelled out by a contract. (You can accept the breach, sue for money damages, or sue for specific performance)
