Chapter 9
Other Misrepresentation definition stuff
Express v Implied terms
Standard form (on PP)
Boilerplate
Plain language
MR remedies
Exclusion/limited liability clause
Liquidated dmgs (on PP)
Chapter 11
Discharge by agreement, breach, performance, operation of law
Option to terminate
Conditions
Executory v Executed
Novation (on PP)
A + S (on PP)
Waiver
Warranty, Intermediate, Condition breaches
Types of breach
Chapter 12
All types of damages (details in PP)
Specific performance
Unjust Enrichment
Injunction
CHAPTER 8 XTRA Consideration & Privity
Consideration: the valuable promises exchanged by parties to a
contract where each party promises to either (a) give a benefit to
the other party or (b) promises to suffer a detriment that the law
would otherwise not impose.” - divide as so & include other
portions on Summary
The privity rule states that only parties to a contract can sue or be
sued under that contract, and all
other parties have no right to sue or be sued under that contract,
even if the contracting parties entered the contract for the benefit
of those external parties.”)
CHAPTER 9: Misrepresentation
Misrepresentation is a false statement (must be material) of an
existing fact that causes recipient to enter into a contract
-not actionable: if just inquiry or just with hidden intent
Remedies
Rescission…
Cancels contract and restores parties to pre-contractual state
Discretionary equitable remedy
and restitution
Return of money, land, or goods
Restitution may be denied
if restoration is impossible (paint already applied), if third
party rights would be affected, if contract affirmed
Damages in tort
monetarily reparation of losses for fraud or negligence (types on
C-10 sheet)
Express term: Statement that a reasonable person would believe
was intended to create obligation
Literal approach
words are given their plain and ordinary meaning
Contextual (liberal) approach
intentions and surrounding circumstances considered
Golden rule
words given ordinary meaning unless result is absurdity
contra proferentem
ambiguities interpreted against person drafting the clause
Boilerplate clause: a standard provision that can be reused in
various contractual settings
Force majeure clause
protects parties for non-performance due to unpreventable
event
Confidentiality clauses
restricts disclosure or use of confidential information
Arbitration clauses
agreeing to resolve disputes through arbitration not
litigation
Jurisdiction clauses
predetermines the locale of the court and whose laws will
apply in event of legal dispute
Entire Agreement clause
states that entire agreement contained within four corners
of written contract
controls risk that contract may be partially written and
partially oral
Rule: parol evidence cannot vary written terms
“parol” is evidence not contained in written contract
Collateral contract: a separate promise one party makes in
exchange for the other party’s entry into the main contract
(separate consideration needed)
business efficacy test: term required to make commercial
sense
term reflects standard practice in parties’ field
parties habitually included term
term necessary in specific field
CHAPTER 11: Discharge & Breach
1. Discharge by Performance
Doctrine of Substantial Performance: sometimes discharge if
obligation is substantially perform
innocent party entitled to contractual damages for defect
Entire contracts: no payment due unless all work performed
but liable for any benefits you chose to accept after breach
2. Discharge by Agreement
Option to terminate: a unilateral right to discharge
Conditional contract: a contract is affected (starts or ends) by an
external event
Condition subsequent: contract exists, and parties must perform,
until event occurs
contract ends automatically if/when specified event occurs
Condition precedent: contract comes into existence
obligation to perform does not occur unless event occurs
Executory obligation: a party has not fully performed (recission if
both sides no perform)
Executed obligation: a party has fully performed
Variation: small changes to existing contract
contract retained but on new terms
Release: discharge under seal
used to discharge a contract without fresh consideration
executory party gives no new consideration
3. Discharge by Operation of Law
4. Discharge by Breach of Condition
Breach: failure to fulfill contractual promise
Whether discharged depends upon type of term breached
condition: substantial term
warranty: lesser term
intermediate: hybrid term
Types:
1. Defective performance (most common breach)
party fails to properly perform contractual obligation
buyer usually entitled to reject delivery unless defect truly
trivial
2. Anticipatory breach
indication that breach will occur in future
innocent party can take action immediately
3. Self-induced impossibility
party renders performance impossible
contrast: frustration (neither party at fault)
CHAPTER 12: REMEDIES
Remoteness as a rule of fairness
contract price reflects exposure to risk
defendant not paid to accept unforeseeable risks
Risk management
before contracting, advise other party of unusual losses you
may suffer from contractual breach OR accept risk yourself
Mitigation: minimization of losses
plaintiff encouraged to minimize losses
arrange alternative supply of materials after breach
plaintiff need merely take reasonable steps
plaintiff entitled to expenses incurred in mitigation
Effect of failure to mitigate
damages reduced to extent losses not reasonably avoided
Account of Profits deals with defendant’s wrongful gains
an equitable remedy
Liquidated damages: genuine pre-estimate of K losses
rationale: avoid litigation and provide incentive to perform
effect of liquidated damages
recovery of agreed amount if breach
actual size of loss (larger or smaller) is irrelevant
Specific Performance:
rooted in equity
denied if plaintiff does not have “clean hands”
court order compelling defendant to actually do what they
promised
plaintiff receives performance of defendant’s contractual
obligations
awarded only if appropriate in circumstances
Damages inadequate: cannot buy substitute
unique land, family heirloom, private shares
Mutuality: available to both parties
cannot be awarded against (or to) infant
Judicial supervision: once-and-for-all order
grocery store not forced to remain open
Personal services: prohibition on slavery
actress not required to appear in movie
Injunction: Court order to obey contractual prohibition
“Don’t do what you promised not to do!”
Generally wider scope of availability than specific
performance
specific performance: large restraint on freedom
cannot do anything other than required act
injunction: small restraint on freedom
can do anything other than prohibited act
independent cause of action
available only if contract remedy is not available
(void, voidable, unenforceable, or discharged by breach)
3 requirements for unjust enrichment
enrichment to defendant
corresponding deprivation to plaintiff
absence of juristic reason for enrichment
Remedy for unjust enrichment is restitution
reverse transfer that occurred between parties
“Give back what you received from me!”
defendant returns value of transferred benefit
defendant does not return actual transferred benefit
