Chapter 2-4: Breach of Contract

Court of equity

A court that is authorized to apply principles of equity, as opposed to law, to cases brought before it.

Which of the following is an explanation for specific performance? A legal procedure or action brought by tenant against a landlord to correct property defects. A legal procedure or action brought by either the buyer or seller to enforce the terms of an agreement for purchase and sale. The date all parties must be present to sign and deliver the necessary documents to close the transaction. Either party has the right to cancel the contract after giving legal notice to the other.

A legal procedure or action brought by either the buyer or seller to enforce the terms of an agreement for purchase and sale.

Which remedy applies to both a contract breach and a tort liability? Specific performance Liquidated damages Monetary damages Rescission and restitution

Monetary damages

Which contract type cannot be enforced by specific performance? A buyer broker agreement. A listing agreement. A property management agreement. None of the above can be enforced by specific performance. All of the above can be enforced by specific performance.

None of the above can be enforced by specific performance

Which statement is correct? Restitution means to unmake the contract. Rescission means to restore the party to the position they were in before entering into the contract Rescission means to cancel the contract. Restitution means to cancel the contract.

Rescission means to cancel the contract.

A breach of contract occurs when one or more parties to a contract fail to perform or incorrectly perform a contract duty. True False

TRUE

When a contracting party, before performance is due, indicates an intention to not perform, the other party to the contract may sue for total breach of contract without waiting for the breach to occur. True False

TRUE

The more material a contract breach or substantial the default, the more likely the breach will be a __________ breach. anticipatory partial unanticipated total

Total Breach

The more material the breach, the more likely the breach will be considered a total breach. terminal breach. temporary breach. technical breach.

Total Breach

Which statement about total breach of contract is FALSE? The contract is terminated when there is a total breach. In the case of total breach, the major issue will be the amount of damages. The more material the breach or more substantial the default, the more likely the breach will be total. Total breach means that the other party is obligated to continue to perform.

Total breach means that the other party is obligated to continue to perform.

Punitive damages based on a tort usually arise when the conduct of a party is so unconscionable that the court wants to issue a remedy designed to punish. True False

True

Contract reformation is only available if all of the following elements are satisfied

Valid contract Valid grounds for reformation

Injunction

When the court asks the breaching party to refrain from doing a specific act

Specific Performance

a form of legal relief requiring the party who breached or defaulted on the contract to fulfill the terms of the contract. "granted by a court of equity"

Specific performance is a legal procedure brought by either buyer or seller to enforce the terms of a real estate contract. a legal procedure brought by a tenant requiring the lessor to produce a lease. the date set for closing at which all parties involved, or their attorneys, must be present and must sign and deliver all documents. the right of either party to cancel the contract, provided legal notice is given to the other party.

a legal procedure brought by either buyer or seller to enforce the terms of a real estate contract.

Breach of Contract

a party to a contract does not honor the contract because of their non-performance or interference with the other party's performance. "type of civil wrong"

pleading in the alternative

a plaintiff can plead inconsistent remedies "allows a plaintiff to submit to the court proposed various remedies for the alleged breach, even though the alternative remedies would appear to be inconsistent"

nominal damages.

a small sum awarded when a contract has been breached but the loss is negligible or unproved

Tort

a wrongful conduct by one person that causes injury to another "carry higher damage rewards than breach of contract"

Intentional Torts

actions intended to harm someone

Unintentional torts

are based on negligence or incompetence

punitive damages

are usually based on a tort, which is a civil wrong that one party inflicts upon another party

personal service contract

cannot be enforced by suit for specific performance. "specific performance can be used as a remedy for breach"

Liquidated damages

damages specified in advance as damages for a breach of contract

Anticipatory repudiation/breach

declaration by a party to a contract that they do not plan to perform the contract before their performance is required.

Partial Breach in Contract

he remaining contract duties are not discharged and the parties must continue with the performance of the remaining terms

A sum agreed upon by the parties to be full damages if a contract is breached is best described as just compensation. judgment for damages. restitution for damages. liquidated damages.

liquidated damages

Rescission

means cancellation, destruction, or unmaking the contract and the return of deposits, if an

Restitution

means restoring the parties to their relative positions before entering into the contract.

Total Breach in Contract

more material the breach or substantial the default, the more likely the breach will be considered total. "can be considered terminated"

actual damages

non breaching party can request monetary compensation is possible, in the same position they would have been had the contract been fully performed.

Reformation of contract

remedy provided by the courst of equity that has specific application to situations where an agreement incorrectly expresses the true agreement

Untimeliness as Total Breach

represent a partial breach and further performance would be required "does not result in total breach unless timely performances are implied or time of the essence is in the contract"

3 If there has been a total breach, which statement is correct? The contract is terminated and no further consequences will result. Further performance can be demanded by the non breaching party. The breaching party is not excused from further performance. The contract is terminated and damages will be the remaining issue.

The contract is terminated and damages will be the remaining issue.

Successful claim for contract interference

The existence of a valid contract; Knowledge of the contractual relationship by the defendant; Intentional interference inducing or causing a breach or termination of the contractual relationship; and Resultant damages to the party whose contractual relationship was terminated

John bought a farm from Case. After farming the property for one year, John realized that the representations Case made about crop yields are false. John and Case agree that a reasonable settlement is for John to deed the property back to Case and for Case to give back John's money. This remedy is an example of contract reformation. specific performance. anticipatory damages. rescission and restitution.

rescission and restitution.

Buyer Linda Brown and Seller Marilyn Johnson entered into a purchase and sale agreement. Johnson later stated that she did not wish to sell the property. In order for Brown to force Johnson to sell, she can sue for foreclosure. assignment. eminent domain. specific performance.

specific performances

remedies for breach of contract are

suit for damages (actual, liquidated, and punitive); attorneys' fees; rescission and restitution; reformation of contract; and specific performance.

types of breach of contract

total breach; partial breach; untimeliness as total breach; and anticipatory breach.

Which remedy applies to both a contract breach and a tort liability? receiving satisfaction through specific performance. unmaking the contract. the amount of damages that are specified in advance during contract formation. trying to restore the parties to their positions before the contract.

trying to restore the parties to their positions before the contract.