BLAW exam 2 Review.docx
.pdf
School
Peruvian University of Applied Sciences**We aren't endorsed by this school
Course
LAW 12
Subject
Law
Date
Dec 17, 2024
Pages
15
Uploaded by GeneralParrotPerson1315
Rawls Social Justice Theory: Principle of fairness and justice chosen under a veil of ignorance.What is the status of the discussion?Alice agrees to sell her computer monitor etc to brad for $300Brad: Ill accept if you include your word processing software?No contract because brad has made counter offerGet that degree focus on meContract that contains a provision for damage the parties agree to in advance in case thereis a breach?What term defines those types of damage provisions?Liquated damage provisionChapter 91.Parties to a contract - 187Offeror is person who makes offer, offeree to whom offer is made.2.Elements of a contract - 188●Contract is an agreement that is enforceable by a court of law●Basic elements that are required for a valid contract include:agreement,consideration, contractual capacity, lawful object.3.Defenses to the enforcement of a contract - 188●Types of defense that can be raised: Defense of duress, undue influence, fraud●If the agreement was required to be in writing under statute of frauds but was notin writing?oThis is a defense you could raise duress, under influence, fraud, and lackof a proper writing when it is required.4.Sources of Contract Law - 188●Main source is common law of contracts●Uniform Commercial Code:can take precedence over common law of contracts| major source of contract law and occasions where parts of it take precedenceover state laws●Restatement of the law of contracts is NOT a law, it’s a compilation of differentstate laws | lawyers and judges can cite the restatement of a law of in decidingcontract disputes5.Classifications of bilateral and unilateral - 191Unilateral Contract:promise of an actBilateral Contract: Promise for Promise |●If you promise to paint my wall, I promise I pay you $400 by July 1st●Any ambiguity as to which contract it is, it is always presumed to be bilateralWhen can you change your offer?Unilateral Contract:
●Someone promises another person if they run and finish the Boston Marathonthey will pay them five grand. Person B starts running BM can Person A revokethe promise?●No once you make an unilateral contract and the person starts performing youcannot revoke the offer.What are some examples of Formal Contracts? - 192 - 193Checks, Drafts, Notes, Certificates of Deposit, Letters of Credit and Recognizes,Contracts under Seal.What would be true to enforce a contract?●Valid: Must be enforceable by at least one party to it.●Void Contractscannot be enforced at all.●Voidable Contract:one person has to have option to avoid contractualobligations6.Executory and Executed Contracts - 193●Which of the following are true about executed and executory contracts?oExecuted contracthas been fully performed.oExecutory contracthas not been fully performed by both partiesoExpress contract can be written or oral; most personal and business areexpress contracts▪Example:to buy an automobile from a dealership is an expresscontact because it is in written words▪Example:The purchase of a neighbor’s bicycle through oralargreement is an express contract because it’s in oral words7.Implied in fact and Implied in law (Quasi Contracts) – 195 - 196●Implied in Law:An equitable Doctrine whereby a court may award monetarydamages to a plaintiff or provide work or services to a defendant even though noactual contract existed.The doctrine is intended to prevent unjust enrichment andunjust detriment●If you have an enforceable contract between parties you cannot use the equitabledoctrine of implied in law contracts.●Implied in factcontracts can be implied from the conduct of both parties.●What about Action in equity?oYou sue under a quasi contract theory to enforce, you are not entitled tojury trial, it would tried by judge8.Uniform Computer Information Transactions Act (UCITA) - 197●Established uniform rules for the formation of electronic contracts and licenses.●Adopted by states, NOT federal law.●Most states have not adopted it.Chapter 101.Elements of Effective Offer - 202●Person making an offer must objectively intend to be bound.oIt has to be clearoIf offeree accepts there will be contract●Terms must be definite and reasonably certain
●Offer can be written or oral●Must be communicated to offeree in order to be effective2.Examples of Acceptable implied contract terms – 202 -203●Are there terms of a contract that can be implied?YesoTime of performance,oPrice using market or source to determine price3.Communication of an offer-who can accept it - 209If person A offers an item to person B for $400 and person C overhears, it they cannotaccept. Not valid because the offer was not made to person C.●Only person who can accept the offer is to the person who the offer is made4.Revocation of Offer by Offeror – 205●If I orally offer you something for 200 bucks and promise to hold it for 2 weeksand sell it to someone else a week later.●Is the offer revoked?the offer is revoked, its not a firm offer.●Firm Offer:under uniform commercial code must be made by merchant and inwriting.Offeree in the above situation has no power to revoke sale.When is Revocation effective?Upon receipt or knowledge of selling item tosomeone else.●Make the offeree believe that the offer is no longer open5.Special Types of Offers – advertisements (can they be offers) rewards and auctions(with and without reserve) – 204 - 205a.Advertisementsare normally only invitations to make an offer, but under somecircumstances advertisements can be a valid offerWhat if you make a Reward to someone and they are not aware of the offer andthey perform the requested act? Is it entitled to a reward?-●you cannot accept an offer of which you had no knowledge even if you performthe requested act●With Reserve:Person offering the item for sale can withdraw the good for sale,even after bids are made●Without Reserve:An option in which the seller expressly gives up the right towithdraw the goods from a sale and must accept the highest bid6.Terminations of offers under the common law – revocation, refection, and counteroffers (when effective and by means of newspaper) – 205 - 206●Revocation -Effective upon receipt or knowledge of saying by theofferee(Selling the item to somebody else)oIf you publish the revocation in the newspaper it is effective even if theperson did not see it●Rejection- if you mail the rejection it is only effective upon receiptoIf you send a rejection and in the meantime you change your mind andaccept it, the acceptance would be good
oMailed rejection of offeris only effective about receipt of it. If youchange mind before receipt is acquired then acceptance would be valid |not effective when sentoMailed counter offeris the same circumstance, only effective uponreceipt | not effective when sent●Counter Offer:Effective upon receipt and by means of news paper●Newspaper offer:If you make an offer in the newspaper and revoke it in thesame newspaper that revocation is effective against everyone.oEven against people who didn’t see revocation but saw the offer.7.Termination of offers under the common law by the operation of law (examples)207 -208What about offers terminated under operation of laws?●Destruction of subject matter before offer is accepted. i.e fire destroys offerno fault by either party, that offer is terminated●Death of either party or incompetence of either partywould terminate offer |Prior to acceptance of offer | Only one needs to die●Expireswithin the date that the offer was dispatchedWhat about giving ten days to accept the offer?.●Offer is dated January tenth and its mailed and you receive it the 14thyou have until the 20th.●Ten days on when the offer is made, not when the mail is dispatched8.Acceptance of offers under the common law (mirror image rule, silence mailboxrule, and joint offerees) 209 – 211Mirror image rule:Specifically state terms of offer, any attempt to change the termsconstitute a counter offer which then rejects the original offer.●Must accept the exact terms.●Add or deduct anything makes it a counter offerWill set silence operate as acceptance by the offeree constitutes acceptance of theoffer?●No, can’t be assumed that the offeree will accept itIf the offers are made to two or more people jointly, you want both people tosign?Both have to accept contractMailbox rule:Acceptance built upon dispatch●Means of communication acceptance●If no means of communication is specified in the offer General rule anymedium reasonable under the circumstances it’ll be valid●If you specify acceptance it must be specified by using a certain means andyou using a different means then it will not be valid.
Chapter 11 and 181.Requirements for valid consideration to exist (including legal benefit anddetriment, bargained for exchange, gift promise and promissory estoppel) 206 -218,222●Requirements for valid considerations to exist:Someone promises to buildgarage for $6000, prices go up for materials so they claim you need to pay extra,under common law you do not have to pay additional money. They’ve given noadditional consideration. They must build a garage for $6000.oDebt is not disputed●Legal Benefit:You promise your nephew Robbie $100 to quit smoking for amonth. He completes it, do you have to pay?oYes, he gave up a legal right.Either a benefit to the offeror ordetriment to offer, you don’t need both.oIf you got a benefit and Nephew suffered the detriment●Bargain for exchange:If you promise to buy all the medicine cabinets youneed from me and you stop buying the medicine cabinets because there’s noneed you cannot be sued.oIf you buy them from someone else then there would be a breach.oMust have legal detriment to promisee or benefit to promisor to beenforceable under modern contract law.oMust also be bargain for exchange - Exchange that parties engage in thethat leads to to an enforceable contract●Gift Promise:If you give me a (gift) $100 birthday present you cannot get themoney back.oCan you receive the money back?oAt that point it’s a completed gift promise and you cannot rescind it.●Promissory estoppel:You want to buy land for $25000 but you don’t haveenough money. Someone promises you $25000 and to pay a month rent of $600as birthday present. You put in your remaining money to buy the land but yourfriend rescinds their offer.oDo they still have to give you the $600 – birthday present?▪No there was no justifiable reliance. The promise to make a giftis not enforceable under promissory estoppel.oSince you put up your remaining money to buy the land are youcovered under promissory estoppel?▪Yes, you can sue them for not giving you the $250002.Promises that lack consideration – 219 - 220a.All contracts below are enforceable, special business contracts are enforceableb.Must have legal detriment to promisee or benefit to promisor to be enforceableunder modern contract law.●Output contracts: You will buy all that I manufacture●Requirement contracts:I will buy all that I need from you●Best Efforts Contracts:Both parties to use their best efforts to each theobjective of the contract
*Illusory Contract - Pg 219- Might or might not show up on exam3.Settlements of Claims (accord and satisfaction) - 222●Accord:agreement to settle the dispute●Satisfaction:the payment of the money under the accordSituation:Accords not satisfied and you breach, can you sue to enforce theaccord?●You can sue under the original contract, sue to enforce accord4.Adoption of the Uniform Commercial Code (UCC) - 317●Who has uniform commercial code?oEvery state has adopted part or all of the UCC except Louisiana.5.Coverage of the Uniform Commericial Code (UCC) (what are goods) - 318Article 2What is covered?Sale of goods. Unborn young of an animal is a good underUCC●Not covered: House, employment contract,Stocks, Bonds, Patents●What if we modify sales contracts?●Agreement alone is allowed to modify contract Under UCC you don’t need anyconsideration for it be binding.6.Open terms (price, delivery, time) - 322Open price terms can be read into the sales contract under UCCExamples:●Price:Is a sales contract does not contain a specific price or open price term, areasonable price is implied at the time of delivery●Delivery :If the parties to a sales contracts do not agree on payment terms,payment is due at the time and place at which the buyer is to receive the goods●Time:If the parties do not set a specific time of performance or any obligationunder the contract, the contract must be performed within a reasonable time.●Payment: If the parties to a sales contract do not agree on payment terms,payment is due at the time and place at which the buyer is to receive the goods7.Firm offer rule - 323●What if I orally offer to sell you an autographed baseball for $100, and I say itwill be open for one week, as a merchant can I revoke the offer?oYes, because it was an oral offer and not in writingoAutographed baseball would be good under article 2.oDefinition:Have to be a merchant and offer has to be written in orderfor it to be non-revocable
Chapter 121.Incapacity to contract (infancy, mental incompetence, intoxication) – 226 - 231●Under common law, all three can constitute grounds to not perform aka avoidingindividual’s duties under contract.2.Minor’s right to disaffirm a contract (restoration, restitution, parent’s liability, andnecessaries) 226 -228●When can it occur?oCan occur before or after (reasonably amount of time after) the age ofmajority is attained.●What form would affirm have to take?oOral or writing●Restoration- Based on the rationale that if a minor had to place the adult instatus quo on disaffirmance of a contract, there would be no incentive for anadult not to deal with a minor - goods have to be returned in the condition it atthe time at disaffirmance●Restitution -duty of the minor to return any money, property or other valuables ifsuch had depreciated in value; only necessary if the minor has attack recklessly orgrossly negligent●Can adult/other party disaffirm contract from a minor, mentalincompetent, or intoxicated person?oNo, they have no grounds to disaffirm the contract.oCannot disaffirm contract as adult if they think minor will disaffirm.Adult party has no grounds●Ratification:The act of a minor after the minor has reached the age of majority bywhich he or she accepts a contract entered into when a minor; does not have to be inwritingoDoes Ratification by minor have to be in writing?1.No it can be oral or in writing2.They do however have to pay for necessaries based on thereasonable value of the necessaries, not the contract price.●Parents of the minor have the legal obligation to provide food, shelter, clothing,and other necessaries of life while the child is a minor or has not becomeemancipated.3.Mental incompetency (adjudged and not adjudged insane, lucid interval) 229 – 231●If a person has beenadjudgedinsane any contract the adjudged insane person isbrought into is void.oIf you haven’t beennot adjudgedinsane but are insane the contract isvoidable.●Lucid interval:If a person has periods of insanity and normalcy and they entera contract during a period of “normalcy” it is enforceable. Doesn’t matter ifthey’re insane the next day.●Insane people are liable inquasi contract to pay the reasonable value fornecessaries in life.4.Intoxication (voluntary, involuntary, and liability for necessaries) - 231
●Most states hold that intoxication(voluntary or involuntary)is enough toavoid a contract, even if it’s self-induced.oVoluntary:Self - InflictedoInvoluntary:forced by othersoOnly some states allow contracts to be disaffirmed if the person wasforced or did so unknowingly.●Intoxicated persons are liable to pay for necessaries they receive.5.Usury (remedies) - 233What do states do regarding Usuries loans?●Depends on state●Some states rule the borrower has to pay the difference charged on the interestrate charged on the loan and the usuries rate●Other states void usuries loans●Some states will apply payments made on debt6.Illegal contracts (gambling and enforcement) -234●Federal law permits casinos to operate under Indian Gambling Regulatory Act.oThe state must permit gambling for Indian Gambling Regulatory Act toapply●What if an illegal contract is executed?EnforcementoThe court will generally leave the parties where they’re found, ifcontract was fully executed/performedoSome circumstances the court system will allow the innocent party in anillegal contract to sue for damages or to recover consideration paid underthe illegal contract.7.Licensing statutes (revenue raising and regulatory) – 235-236●Revenue raising:No tests/qualifications you need to have to obtain a license.i.e. sales person(with no education/testing requirement), fishing/hunting licenseoStatue on sales people, pay to pay licensing fee, no training requirementit is revenue raising●Regulatory:There are some education/testing requirements. i.e. doctor, teacher,insurance agents8.Unconsumable contracts (exculpatory clause and adhesion contracts) – 236 – 238●Adhesion contract:contract prepared on a standard from offering terms on a take itor leave it basis○Pre-printed forms whose terms the consumer cannot negotiate and that theymust sign in order to obtain a product or service. Even though there is adisparity in power of contracting●Exculpatory clause is a contract provision that relieves one party of liability ifdamages are caused during the execution of the contract. The party that issuesthe exculpatory clause is typically the one seeking to be relieved of the potentialliability.○Release of reliability clause
Chapter 131.Grounds for rescinding a contract based on mistake – 243-244●Unilateral mistake:Allows a person making a mistake to rescind a contractunder three circumstances.oIf the other party knew or should’ve known that a mistake was made,innocent party can avoid contractoIf mistake is made because of clerical or mathematical error, not grossnegligence, contract can be voided under unilateral mistakeoIf the mistake is so serious that enforcing the contract would beunconscionable then contract is voidable●A contract may be rescinded under multiple circumstancesoMutual mistake ofMATERIALfactoMutual mistake of value if both parties know the object of contract butare mistaken as to its value▪Example:Helen cleaned her attic and found a red and green silkscreen painting of a tomato soup can. She has no use for thepainting, so she offers to sell it to Jack for $100, who thinks thepainting is cute, accepts the offer to pay Helen $100. It's laterdiscovered that the painting was worth $2 million because it waspainted by the famous American pop artist Andy Warhol. Neitherparty knew this at the time they entered the contract. It is a mistakeof value. Helen cannot recover the paintingoBenefit of Bargain Rule: Misrepresents value of $6000, bought for$5500 it is worth $2,500▪You can recover $3500 - same financial position received fromthe benefitoOut - of - pocket Rule: Misrepresents value of $6000, bought for$5500 it is worth $2,500▪You can recover $3000 - Difference in worth & price purchasedat●Ambiguity in contract which could constitute a mutual mistake of a materialfact2.Elements of Fraud - 244●In order to prove intentional or fraudulent misrepresentation you must prove thefollowing:oThe wrongdoer made a misrepresentation of aMATERIALfactoThe wrongdoer intended to deceive innocent partyoThe innocent party justifiably relied on the misrepresentationoInnocent party was injured●All four are required to prove intentional or fraudulent misrepresentation3.Types of Fraud (inception, inducement, and concealment) - 245-246●Fraud in inceptionmeans contract is voidoOccurs if a person is deceived as to the nature of his or her act and doesknot what he or she is signing●Fraud in the inducementmeans fraud is voidable
oThe innocent party knows what he or she is signing or doing but hasbeen fraudulently induced to enter into the contract●Fraud by concealment occurs when one party takes specific action to concealMATERIALfact from other party4.Proof necessary to recover for fraud, remedies available and effect on contract ifproven – 244-245●Proof:Statement of opinion or prediction about future generally are not enoughto rescind contract based on fraud●Remedy:Proof of mental distress alone is not sufficient to recover damages forfraud, you have to show monetary loss●Effect:If misrepresentation is extravagant and obviously false justifiablereliance is not sufficient.5.Types of fraud (silence, misrepresentation of law and innocent misrepresentation)- 247●Silence:If there is a fiduciary relationship silence can qualify formisrepresentation●Misrepresentation of lawisNOTgenerally actionable as fraud●Innocent misrepresentation:The innocent partyCANsue for damages andrescind contract.6.Duress and Undue Influence (examples and effect) 248-249●What if you make a threat to bring or not drop aCRIMINALlawsuit unlesssomeone enters into a contract?oThat isduress●What if you make a threat to bring or not drop aCIVILlawsuit unless someoneenters into a contract? Does this constitute duress?oDoes not constitute a duress unless lawsuit is frivolous or brought in badfaith●Contract entered into because of undue influence is voidableChapter 141.Types of contracts that are within the statute of frauds (i.e. must be in writing tobe enforceable) - 253●Most states require the following contracts to be in writing under statute offrauds:oReal estate agents contracts to sell real property,oa prenup,ocontract to sale goods for price of $500 or moreocontracts involving interest in real property|▪possible perform by its term it is ok | if not its within statue offraudopromise to pay debt of another▪A owe C moneys – Collateral promise, which you answer topromise to pay the debt of another. Needs to be in writing.opromises upon consideration of marriageoContract for the lease of goods of $1000 or more
oContracts to pay debts barred by the statute of limitations or dischargedbankruptcyoContracts to pay compensation for services rendered in negotiating thepurchase of businessoFinder’s Feeopromises to write a will●If you promise to loan someone $499 is that under statute of fraud?●Amount doesn’t matter, promise to loan money is not under statute of frauds.2.Examples of interest in real estate - 254●Any Contract that transfers an ownership interest in interest real property mustbe in writing to be enforceable●Mortgages, leases for a term of more than one year●life estates3.Examples of one year rule- 255●if contract cannot possibly be performed within one year it must be in writing.4.Guaranty contract and main purpose rule- 255-256Guaranty Contract:To answer for the debts or duties of another personrequired to be in writing under the statue of frauds●Person A owes Person B $499 and Person C promises Person B to pay $499 ifPerson A doesn’t pay. That is a guaranty promise●Person A owes Person B $499 and Person C promises Person A to pay their$499 debt. This is not a guaranty.oPromise must be made to creditor not debtor●Main Purpose Doctrine:If the primary purpose of a promise is not to pay thedebt of the other, and I get a benefit for myself - not under the statute of frauds anddoes not have to be in writingoExample: If person A promises to rebuild Person B’s automobiletransmission but cannot get the parts needed because of bad credit. Soperson B says to Person C to go ahead and give Person A the parts and ifhe doesn’t pay you I will.oThat is the promise to pay the debt of another, doesn’t have to be inwriting because of Main Purpose Doctrine.oPerson B is trying to gain a benefit for himself. Gaining benefit for selfis Main Purpose DoctrineoNot under statue of fraud does not need to be under writing●Example:You have client who dies and you are the personal representative ofthe estate. The client who died owes money, so you go to the creditor and say ifthere isn’t enough money in the estate I will personally pay you.oThat is not enforceable.oIt was a promise to pay the debt of another orally it wasn’t in writing.5.Sale of goods (dollar amount and what are they) - 267,318●Someone promises to sell 14 watches at $40 a piece, promise to deliver no lessthan one watch a month and no more than two watches a month. Is that underthe statute of frauds?oYes, 14 watches at $40 is over 500. Needs to be in writing.
oIf it was 14 watches at $20 then it wouldn’t have to be in writing280<500●What if you don’t have to pay the $40 per watch until the 10thmonth of contract?●Still over $500 so needs to be in writing6.Part performance doctrine - 257●The court can grant specific performance of an oral contract under whatequitable doctrine, that is not under the statue of fraud is what?oPart Performance7.Writing requirements under Statute of Frauds – 258-259●Does not have to be signed by both parties. Only needs signature from partyagainst whom the enforcement of the contract is sought.●Does not have to be a person's full name i.e. stamp, initials, etc.●More than one document can be used under the requirements of the statute offrauds for writing.8.Standards of interpretation of contract words and terms 259●Basic Rule: Ordinary words are given their interpreted meaning according to thedictionary●Preprinted form is used●Typed words in a contract will prevail over pre-printed words●Handwritten words in a contract will prevail over both pre printed and typedwords.FALSE:If there’s ambiguity in a contract, the ambiguity will be resolved against theparty who has the most formal education●Depends on circumstances9.Exceptions to parole evidence rule – 261 |●Parole Evidence Rule:A completely integrated contract is viewed as of the bestevidence of the terms of the parties agreement○Rule states that if that is a written contract is a complete and final statement ofthe parties agreement(i.e complete integration), , any prior workcontemporaneous or written statement. Alter, contradict, or are in addition tothe of the written contract are inadmissible in any Court proceeding in thecontract●When can you introduce evidence that is an exception to parole evidencerule?●Normally, you cannot enter any oral evidence to change the plain meeting of thecontract●Parole evidence rule covers the oral/written words outside the four corners butthere areexceptions to the rule.oYou can use parole rule of oral/written words outside the four corners toshow contract is void or voidableoCan use parole evidence to explain ambiguity in the contractoCan use parole evidence to change obvious clerical or typographicalerror
10. Conditions for applying doctrine of promissory estoppel - 262●There is a situation where there should’ve been a written contract under statuteof frauds but it is an oral contract, under which circumstances will that oralcontract be enforced?oThe promised induces action or forbearance of action by anotheroThe reliance on the oral promise was foreseeableoInjustice can only be avoidable by enforcing oral promiseChapter 151.Assignment of Rights – 267-268●Parties in contract are said to be in privity of contract.oThe person who’s receiving the assignment is the assignee.oPerson who’s making the assignment is the assignor.●A contract that provides personal services are not generally assignable●Can a person assign a nonexistent right? You expect the right to arise in thefuture and don’t have it now.No●Can parties in a contract agree to allow personal services to be assigned?Yes●Can contracts be assigned if the assignment would materially alter the risk orduties of the obligor?No2.Effect of an assignment of a right - 268●A right to sue another party for violation of personal rights cannot be assigned.●Can the legal right that arises out of a breach of contract be assigned?YesoProblem is the person who takes the assignment has no better rights thanthe person who assigned them had.oAssignee and Assignor have the same rights, the person who’s obligatedunder contract has the right to defense for both assignor and assignee.oPerson A makes an assignment to Person B, B doesn’t notify the obligorof the assignment. Can obligors continue to make payments to theassignor? | Does not notify obligoroYESbut assignee cannot sue obligor but can sue assignor.3.Anti-assignment and approval cause – 268-269●FALSE:In the event of an approval clause in a contract that requires the obligorto approve assignment very few states prohibit the obligor from reasonablywithholding approval.●Anti Assignment Clause:clause that prohibits the assignment of rights under thecontract●TRUE:Any assignment clause in a contract are usually given effect.4.Successive assignments (the American rule and English rule) – 269 -270If the obligee fraudulently makes successive assignments of the same right to a number ofassignees, which is a sign he has the legal right to the assigned right?●American Rule (New York Rule):First person who gets assignment is entitledto benefits of the contract even if it assigned to more than oneoEX:if assigned to B, C, & D who wins? B●English Rule (minority rule):First person takes the assignment doesn’t matter,it depends on the first person who notifies the obligor of the assignment.oEX: If assigned to B, C, & D who wins? First person to notify
●Position of tangible token rule:first assignee who receives delivery of thetangible token prevails over subsequent assignees.5.Delegation of duties (when permitted and the difference between assumption anddeclaration of duties) - 271●Personal services contracts calling for the personal skills discretion or expertiseCANNOTbe delegated.●If performance would purely vary the obligorsCANNOTbe delegated●If you pay a law firm to represent you in a case can the firm designate any of itsqualified members to represent you?Yes●FALSE:Pursuant to an assumption clause and declaration of duties clause theobligee can sue the delegate for non-performance or negligent performance.6.Anti-delegation clauses - 271●Anti-delegation clauses in contracts are usually enforced.●Most courts hold that even if there is an anti-delegation clause in a contract,payment of money can be delegated it’s impersonal.7.Types of third party beneficiaries and their rights 272 - 275●Intended beneficiary:Can enforce contract, third party beneficiary●Incidental beneficiary:has no rights under contract, not a third partybeneficiary●Donee beneficiary:Can enforce a contract.oi.e. life insurance beneficiary●Accredited beneficiary: Can enforce the contract against the original promisorand the new debtor promisor.oi.e. I owe you money and I assign a contract to someone else and theydon’t pay I can be sued by you.8.Covenants in a contract - 276●Covenant in a contract is not a conditional promise to perform but an absolutepromise to perform9.Types of conditions in a contract – 277 -278●Preceded●Subsequent●Incurrent●Imply10. Conditions precedent in a contract (personal satisfaction test and time is of theessence) - 277●Under personal satisfaction test can a person reject the performance of acontract for any reason no matter or how not in good faith it is?NO●What if a contract provides time is of the essence?oMost courts hold that a delay is a minor breach and give performingparty additional time to perform.11. Types of discharge of a contractual duty – 279 -280What are methods under which parties can be discharged?●Can be discharged under agreement of parties based on performanceoImpossible to perform can discharge
oForce Majeure Clause: parties agree that events excuse non performance12. Discharge by agreement of the parties (mutual recission, substituted contract,novation, accord and satisfaction) – 279●Can a unilateral recession by one of the parties effective in terminating acontract?oUnilateral Recission isNOTa dischargeoSubstituted contract discharges parties from performance. You wouldhave to sue under the substituted contract●Novation:Third party is substituted for another party.oIf person A and B are in a contract, Person B gets C to substitute into thecontract. Person C doesn’t perform, A cannot sue person B.oRelease party are no longer liable, even if the substitute party does notperform.●Accord and satisfaction: parties to a contract may agree to settle a contractdispute13. Discharge by impossibility of performance (examples) - 280●Personal Services contract in which person who promises to perform dies orbecomes incapacitated the contract is discharged by impossibility ofperformance.●Destruction of subject matter for contract of prior performance would be adischarge●Something makes the performance illegal then it would be a discharge forimpossibility.