Chapter 7 Contracts.pptx Chapter 7 Contracts.pptx

Chapter 7 Contracts.pptx

1. IMPORTANT DATES ASSSIGNMENT S – May 24 (Fri) MIDTERM – May 31 (Fri) FINAL EXAM: June 7 ( Fri )

2. DISCHARGE OF CONTRACT Chapter 7

3. "Tender of performance" and "tender of payment" are legal concepts related to the fulfillment of contractual obligations. Here’s a breakdown of what each term means:

4. Tender of Performance Definition: Tender of performance refers to an offer by a party to a contract to perform their obligations under the contract. This involves doing everything that is necessary to fulfill the terms of the agreement. Key Points: Good Faith Effort: The party must demonstrate a genuine and sincere effort to fulfill their contractual duties. Readiness and Willingness: The party must be ready and willing to perform the obligations as stipulated in the contract. Adequate Performance: The performance offered must meet the standards and conditions set forth in the contract. Notice: The party offering performance typically needs to notify the other party of their intent and readiness to perform.

5. Example: If a contractor agrees to build a house by a certain date, tender of performance would involve the contractor showing up with the necessary materials and crew, ready to begin construction on the agreed date.

6. Tender of Payment Definition: Tender of payment refers to an offer to pay the amount due under a contract. This involves the act of offering the agreed sum of money to the other party as payment for goods or services received. Key Points: Exact Amount: The amount offered must be the exact amount due under the contract. Proper Form: The payment must be made in the proper form as stipulated in the contract (e.g., cash, check, bank transfer). Timeliness: The payment must be offered at the time and place specified in the contract. Good Faith: The party must make a sincere effort to pay the owed amount.

7. Example: If a buyer agrees to purchase a car for $10,000, tender of payment would involve the buyer offering to pay the $10,000 on the agreed date, possibly by handing over a cashier's check or conducting a bank transfer.

8. Legal Implications Discharge of Obligation: If a party makes a proper tender of performance or payment, it can discharge their obligation under the contract, even if the other party refuses to accept it. Defense: A proper tender can serve as a defense in a lawsuit if the other party claims non-performance or non-payment. Interest and Penalties: If the tender is refused, the party making the tender may not be liable for additional interest or penalties that accrue due to non-payment or non-performance.

9. Once a contract has been discharged, the obligations under that contract are can- celled, and the contract itself is null and void

10. DISCHARGED

11. CONTRACT MAY BE DISCHARGED BY By performance By agreement As of right By operation of law By frustration or By breach.

12. The most common way to discharge a contract is by performing the obligations under the contract. Performance may consist of performing services, paying money, delivering goods, and so on.

13. TENDER OF PERFORMANCE

14. DISCHARGE BY PERFORMANCE

15. LEGAL TENDER

16. WAIVER

17. WAIVER

18. Requirements of a Waiver of Contract Knowledge of Rights: The party waiving the right must be fully aware of the right they are relinquishing. They must understand the terms and conditions of the contract and know what they are giving up. Voluntary Intent: The waiver must be made voluntarily and intentionally. There should be no coercion, undue influence, or pressure from the other party. The party waiving the right must do so of their own free will. Clear and Unequivocal: The waiver should be clear and unequivocal. It must be evident that the party intends to waive the right. This can be done through explicit language in writing or through actions that unmistakably indicate the intent to waive.

19. Requirements of a Waiver of Contract Consideration: While not always necessary, consideration (something of value exchanged) may be required in some cases to support the waiver. This is particularly true if the waiver results in a significant change to the obligations or rights under the contract. Communication: The waiver should be communicated to the other party. The party that benefits from the waiver must be informed that the other party is waiving a right or claim. Compliance with Contract Terms: The waiver must comply with any specific terms or conditions set forth in the contract regarding waivers. Some contracts have clauses that specify how waivers must be made (e.g., in writing).

20. Types of Waivers Express Waiver: An express waiver is explicitly stated, often in writing. For example, a written statement in a contract amendment that waives a particular requirement. Implied Waiver: An implied waiver is inferred from actions or conduct that suggest the party intends to relinquish a right. For example, consistently accepting late payments without objection can imply a waiver of the right to insist on timely payments.

21. Legal Implications Binding Nature: Once a waiver is made, it is typically binding and enforceable. The party waiving the right cannot later decide to enforce the waived provision, unless the waiver is retracted (if allowed). Estoppel: The party benefiting from the waiver may rely on it to their detriment. If they change their position based on the waiver, the waiving party may be estopped (prevented) from later asserting the waived right. Scope and Duration: The waiver may be limited in scope (waiving only a specific right) or in duration (waiving the right for a specific period). It’s important to clearly define these aspects to avoid ambiguity.

22. MATERIAL ALTERATION

23. MATERIAL ALTERATION

24. Effects of a Material Alteration Discharge of Obligations: If a material alteration is made without the consent of all parties, the non-consenting party may be discharged from their contractual obligations. This is because the contract they agreed to has been fundamentally changed without their agreement. Voidability: The contract may become voidable at the option of the non-consenting party. They can choose to either accept the altered contract or void it entirely. If they void it, they are no longer bound by its terms. Reversion to Original Terms: In some cases, if the alteration is discovered and addressed promptly, the parties may agree to revert to the original terms of the contract. This requires mutual consent and a clear agreement to disregard the unauthorized changes.

25. Effects of a Material Alteration Legal Remedies: The non-consenting party may seek legal remedies such as damages if they have suffered a loss due to the material alteration. They can potentially recover the costs or losses incurred because of the alteration. Enforceability Issues: A materially altered contract may face enforceability issues in court. The court may refuse to enforce the altered terms and instead enforce the original contract, if it can be restored to its original form and if doing so is equitable. Good Faith and Fair Dealing: Material alterations can be seen as a breach of the duty of good faith and fair dealing inherent in contracts. This can undermine trust between the parties and may result in additional claims for breach of this duty.

26. Effects of a Material Alteration Material alterations of a contract can have significant legal and practical implications. It is crucial for parties to communicate, document, and agree upon any changes to avoid disputes and ensure that the contract remains enforceable and fair. When in doubt, seeking legal advice can help navigate the complexities associated with contract modifications.

27. ACCORD AND SATISFACTION

28. distinction between accord and satisfaction and the material alteration of terms There is a distinction between accord and satisfaction and the material alteration of terms or a substituted agreement, which is found in the intent of the parties. accord and satisfaction , With the primary intent of the parties is to discharge the existing contract. In the case of a material alteration of terms or a substituted agreement, the primary intent of the parties is to form a new contract.

29. OPTION TO TERMIN ATE

30. CONDITION PRECEDENT

31. CONDITION SUBSEQUENT AN EVENT THAT, IF IT OCCURS, WILL TERMINATE AN EXISTING CONTRACT With a condition subsequent, the contract exists, and performance is required, but the contract may be discharged if the event occurs. For example, a contract to attend an outdoor concert may contain a term that states that the ticket price is refundable if the concert is cancelled due to weather conditions.

32. DUE DILIGENCE

33. BANKRUPTCY AND INSOLVENCY ACT The Bankruptcy and Insolvency Act provides that upon being released or discharged from bankruptcy, all of the contracts under which the bankrupt had any obligations are discharged. There are some exceptions to this, which include obligations to pay child support and to repay student loans.

34. DOCTRINE OF LACHES

35. Discharging a Contract

36. BREACH OF CONTRACT & REMEDIES Chapter 8

37. BREACH OF CONTRACT

38. Different types of breaches have different consequences.

39. REPUDIATE T o renounce or reject an obligation Thereby breaching the contract

40. EXPRESS REPUDIATION/ EXPRESS BREACH The failure or refusal to perform the obligations under a contract when they become due. The most common form of repudiation. The repudiation must be clear, unambiguous, and explicit. It may take the form of an actual declaration of refusal, or simply a failure to perform.

41. ANTICI P A T O R Y BREACH

42. IMPLIED REPUDIATION

43. NATURE OF BREACH A term of a contract that is essential or goes to the root of the contract is called a condition A breach of a condition must wholly deprive the innocent party of the benefit he or she expected to receive under the contract.

44. DAMAGES The most common remedy for breach of contract is the award of damages. Damages are a sum of money to compensate the injured party The intent of the court in making such an award is, as far as possible, to put the injured party the position that he or she would have been in had the contract been fully performed This is a popular remedy because with most contracts it is easy to translate the non- performance into monetary loss

45. Liquidated Damages

46. UNLIQUIDATED DAMAGES

47. CONSEQUENTIAL DAMAGES

48. EXPECTANCY DAMAGES

49. LOSS OPPORTUNITY DAMAGES

50. MITIGATE

51. EQUITABLE REMEDIES

52. SPECIFIC PERFORMANCE This Photo by Unknown author is licensed under CC BY- SA .

53. SPECIFIC PERFORMANCE

54. SPECIFIC PERFORMANCE Because specific performance is an equitable remedy, certain restrictions are placed on the party asking for the remedy. Equity requires that this party come to court with “clean hands”— that is, free of any unethical behaviour. If a party does not have clean hands, he or she will be denied the equitable remedy and will be awarded monetary damages. Equitable remedies can also be denied if the injured party was partly at fault or contributed to the breach of contract in some way, or if he or she delayed for an unreasonable length of time in pursuing a remedy for the breach. These restrictions apply to all equitable remedies.

55. INJUNCTIONS

56. PROHIBITORY INJUCTION

57. MANDATORY INJUNCTION

58. NEGATIVE COVENANT

59. Performance and Breach

60. This Photo by Unknown Author is licensed under CC BY

61. REFERENCE