Term
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Definition
| if contractual duty has not been discharged party owes an absolute duty to perform |
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Term
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Definition
| a contracting party fails to perform an absolute duty owed |
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Term
| Types of Contractual Performance |
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Definition
complete performance
substantial performance
inferior performance |
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Term
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Definition
-strict performance
-contract is executed
-performing party is discharged |
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Term
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Definition
-minor breach of contract
-performance deviates slightly from complete performance
-non-breaching party may recover damages |
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Term
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Definition
-material breach of contractual obligations
-non-breaching party excused from any further performance
-non-breaching party may rescind contract and seek restitution or sue to enforce contract and seek damages |
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Term
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Definition
-party repudiates; indicates that he or she will not perform duties
-nonbreaching party immediately discharged
-nonbreaching party may sue immediately |
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Term
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Definition
-available to nonbreaching party upon any breach (minor or material)
-intended to compensate nonbreaching party for loss of bargain |
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Term
| Types of monetary damages |
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Definition
compensatory
consequential
- nominal
-liquidated |
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Term
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Definition
-compensate nonbreaching party for the loss of the bargain
-amount awarded depends on: type of contract and which party breached
-speacial types of contracts: sale of goods, construction contracts, employment contracts
-place nonbreaching party in posistion would have had if contract had been fully performed
-restore benefit of the bargain |
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Term
| mitigation of damages (compensatory damages) |
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Definition
-nonbreaching party has duty to avoid or reduce damages caused by a breach of contract
-extent of mitigation depends on type of contacts |
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Term
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Definition
-foreseeable damages that arise from circumstances outside the contract
-to be liable for these damages, breaching party must know or have reason to know that the breach will cause such damamges |
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Term
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Definition
-parties agree in advance that certain damages will be available if contract is breached
- to be lawful 1)actual damages must be difficult or impractivable to determine 2) liquidated amount must be reasonable in the circumstances (not punitive) |
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Term
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Definition
-damages awarded when no financial loss has resulted from breach
-usually awarded in a small amount
-cases involving nominal damages are usually brought on "principle" |
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Term
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Definition
-writ of attachment
-writ of garnishment |
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Term
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Definition
| sheriff seizes property for auction, with proceeds to satisfy judgement |
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Term
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Definition
| amount due deducted from wages or bank accounts |
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Term
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Definition
-action to undo the contract
-availbe if: 1) material breach 2)fraud 3) undue influence 4)mistake |
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Term
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Definition
-returning of goods or property received from the other party
-if the actual goods or property is not available cash equivalent must be paid |
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Term
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Definition
-available if legal remedy (money damages) inadequate
- also available to prevent unjust enrichment |
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Term
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Definition
-court order breaching party to perform the acts promised in the contract
-appropriate is subject matter of contract is unique (picaso painting etc.)
-usually not granted for personal contracts because it will be difficult to monitor performance |
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Term
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Definition
-court rewrites contract to express the parties true intentions
-usually used to correct clerical errors |
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Term
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Definition
-court order prohibiting a party from doing a certain act
-only available in limited circumstances |
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Term
| torts associated with contracts |
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Definition
-intentional interference with contractual relations
-breach of implied covenant of faith and fair dealing |
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Term
| intentional interference with contractual relations |
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Definition
-third party induces contracting party to breach
-elements: 1) valid, enforceable contract exists 2) third party knowledge of contract 3)third party inducement of breach to contract |
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Term
| breach of implied covenant of good faith and fair dealing |
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Definition
-parties held to express terms of the contract and required to act in good faith, deal fairly in all respects
- a breach implies covenant is tort for which tort damages are recoverable |
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Term
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Definition
-formed by mutual consent of both parties
-fiduciary relatinoship |
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Term
| kinds of employment relationships |
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Definition
-principal agent
-employer employee
-principal independent contractor |
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Term
| principal - agent relationship |
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Definition
-employer hires employee giving employee authority to act and enter into contracts on their behalf
-extent of authority governed by express agreenment between parties and implied in the circumstances of the agency |
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Term
| employer - employee relationship |
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Definition
-employer hires employee to perform task or service
-employee is ot an agent unless they are specifically empowered to enter into contracts on principals behalf |
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Term
| principle - independent contractor |
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Definition
-principals employ person that are not employees to perform certain tasks
-crucial factor in determining is degree of control
-principal can authorize independent contractor to enter into contracts
-principal liable for authorized contracts |
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Term
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Definition
may be either oral or written (except things like real estate)
may be exclusive agency agreement or power of attorney |
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Term
| formation of agency relationship |
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Definition
- express agency
- agency by ratification
- implied agency
- apparent agency |
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Term
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Definition
-agency is implied from conduct
-extent of authority determined by facts and circumstances of the particular situation |
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Term
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Definition
-express agency agreement may lack certain details regarding performance
- it may be implied that agent possesses duties beyond express agency powers (reasonable actions in emergency situation) |
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Term
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Definition
| occurs when: 1) a person misrepresents himself as another's agent when in fact they are not 2) the purported principal ratifies the unauthorized act |
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Term
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Definition
-agency that arises when a principal creates the appearance of an agency that in actuality does not exist
- principal is estopped from denying the agency relationship |
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Term
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Definition
-compensate agent for services provided
- indemnifies agent for authorized expenses or losses suffered because of the principal
- cooperates with and assists agent in performance of agent's duties |
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Term
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Definition
- must perform lawful duties meeting the standards of reasonable care
- agent must notify principal of relevant information
- agent must maintain accurate accounting of all transactions and money received |
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Term
| termination of agency by act of parties |
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Definition
- mutual agreement
- lapse of time
- purphose achieved
- occurence of specified event |
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Term
| termenation of agency by agreement of parties |
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Definition
- must notify third parties of termination of agency
- if proper notice is not given, agent continues to have apparent authority |
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Term
| agency coupled with an interest |
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Definition
- agency created for agent's benefit
- irrevocable by principal
- not terminated by death or incapacity of either agent or principal
- terminates only when agent's obligations are performed |
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Term
| terminations of agency or employment contract |
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Definition
contracts that do not specify a definite time for termination may be terminated at will by either party without liability
- principal revokes authority
- agent renounces authority |
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Term
| wrongul termination of agency or employment contract |
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Definition
- termination of agency contract in violation of its terms
- nonbreaching party may recover damages
- critical distinction between power and right to terminate an agency |
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Term
| termination of agency by operation of law |
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Definition
-death of principal of agent
-insanity of principal or agent
-bankruptcy of principal
-changed circumstances
-war between principal and gent countries
-impossibility (destruction of subject matter, low of qualifications, change in law) |
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Term
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Definition
-fiduciary duty not to act adversely to the interests of the principal
-common breaches:
-self-dealing
-usurping an opportunity
-competing with principal
-misuse of confidential information
-undisclosed dual agency |
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Term
| principal-agent tort liaility to third parties |
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Definition
-p and a each personally liable for their own tortious conduct
-principal liables for tortious conduct of agent acting within the scope of authority
-agent liable for tortious conduct of principal only if agent directly or indirectly participates in or aids and abets the principal's conduct |
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Term
| principal-agent negligency |
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Definition
-principals liable for negligent conduct of agents acting within the scope of their employment
-principal derives benefits from action through agent and should also bear liabiliity
-liability based on the common law doctrine respondeat superior
-frolic and detour: p may not be liable
-coming and going: p generally not liable
-dualpurpose mission: p generally liable |
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Term
| principal-agent intentional torts |
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Definition
-principal not liable for intentional torts of agents and employees that are committed outside the principal's scope of business
-two tests to determine scope of employment boundaries
-motivation test
- work related test |
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Term
| intentional tort motivation test |
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Definition
- if agent's motivation in committing intentional tort is to promote principal's business, p is liable
- if agent's motivation is personal, p is not liable |
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Term
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Definition
-only applied in some jurisdictions
-if agent commits intentional tort within a work related time or space the p is liable
- agent's motivation is immaterial |
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Term
| agent-principal misrepresentation |
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Definition
-principal is liable for intentional and innocent misrepresentations made by agent within scope of employment
-intentional: a makes statements known to be false
-innocent: a negligently makes misrepresentation |
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Term
| agent-principal contract liability to third parties |
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Definition
-principal who authorizes agent to enteer into a contract with third party is liable on the contract
-third party can enforce and recover damages from principal
-agent also can be held liable in some circumstances |
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Term
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Definition
-third party enterint into the contract knows:
-a is acting as an agent for the p
-actual identity of p
-principal is liable to third party
-agent is not liable |
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Term
| partially disclosed agency |
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Definition
-agent discloses agency status but does not receal the p's identity
-third party does not know the p's identity from another source
-both principal and agent are liable to the third party if principal fails to perform the contract |
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Term
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Definition
-third party is unaware of:
-existence of agency
-principal's identity
-both principal and agent are liable to the third part if the principal fails to perform |
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Term
| agent exceeding scope of authority |
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Definition
-agent who enters into a contract on behalf of another party impliedly warrants that he or she has the authority to do so
-if agent exceeds scope of authority, p is not liable unless p ratifies contract
-agent is liable to the third party for breaching implied warranty of authority |
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Term
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Definition
-person not subject to p's control
-factors in determining independent contractor status:
-worked engaged in distinct occupation of independent business
-worker engaged only for short time
-work supplies own tools |
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Term
| liability for independent contract's: contracts |
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Definition
-p liable if contractor authorized to act as an a
-p bound to authorized contracts
-contractor not liable for authorized contracts |
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Term
| liability for independent contractor: torts |
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Definition
-p generally not liable
-p may be liable for:
-inherently dangerous activities
-negligent selection of contractor
-independent contractor personally liable for their own torts |
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