Legals Studies chapter 10
Legals Studies chapter 10 LGS 200
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This 4 page Class Notes was uploaded by Paget Kern on Thursday February 25, 2016. The Class Notes belongs to LGS 200 at University of Alabama - Tuscaloosa taught by Mr. Brian Turner in Winter 2016. Since its upload, it has received 15 views. For similar materials see Legal Studies Honors/ Legal Environment of Business in Business at University of Alabama - Tuscaloosa.
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Date Created: 02/25/16
Chapter 10 2/24/2016 Performance and Discharge o Discharge by Agreement Discharge by mutual decision Lease between landlord or tenant Can agree to terminate a contract Enter a “termination agreement” contract Verbal, oral, WRITTEN Discharge by Novation Hybrid between termination and assignment o Two parties, Bob pays Jim for landscaping contract o 12 month term, in third month, nine months left o Bobs mom is sick, bob asks jim to landscape for the mom o Everyone says okay, enter a Novation Agreement o Mom pays Jim for landscaping for 9 month term Original contract is terminated, but the new contract has leftover time from the last contract Discharge by settlement agreement Accord and Satisfaction 11 months into 12 month contract, have not paid a dime o Can sue for value in contract o Can extend the contract o Can give an ASSET for same value (car for $10,000 instead of cash) If this accepted, then there is SATISFACTION, and money is no longer due Discharged by Law o Material Alteration Loan $10,000 to be repaid in one year with 10% interest Increase to 20% without agreement o Statutes of Limitations How long to sue someone for breach of contract Typically about 6 years “Under Seal” 10 year statute of limitations o Bankruptcy Unfixable debt Puts credit Credits cannot sue you for breach of contract and inability to pay o Impossibility of Performance Cannot be done, unforeseeable In case of death, others can handle the outstanding contracts Temporary: expected to perform under contract when limitation disappears Destruction of Subject Matter Enters to buy house, house destroyed by tornado Change in Law makes Contract Illegal Commercial Impracticability $2000 for a sprinkler system Yard hit by tornado Sprinkler system now costs $8000 Frustration of Purpose Law passes so you cannot perform your contract Damages for Breach o Compensatory Damages Money awarded to cover costs incurred Example Murley worked for Hallmark Let go, given severance package of 735000 Signed a non-disclosure and non-compete of 18 months Enters a consulting contract with RPG, paid 125K o Tells RPG about Hallmark o Hallmark sues Hallmark asks for 735K and 215K for breach of contract o Court accepts 735K, rejects 125K Punitive damages not allowed for breach of contract o Puts hallmark back where they were o If they got 125K, they would’ve been better off than before, unnecessary Damages actually sustained Standard measure Example o Paid 40K for you job o Employer does not pay, but you are fired o Find a new job for 30K o Can only sue former employer for 40K, the 10K would make you “whole” again Incidental Damages o If fired, need to buy for meals, plane tickets, rental, etc… when finding new job o Tack onto amount of breached contract Sale of goods o Market price minus contract price o Would not have had to pay if original contract was performed o Consequential Damages Foreseeable losses o Punitive Damages Typically not just for breach of contract Included if there is a tort included o Mitigation of Damages Attempt in good faith to reduce damages to what you really need o Liquidation Damages Agree to damages paid Not for punitive damages Prove Hard to estimate damages Amount was reasonable Example o Planning wedding o Enter contract with the band for $10,000 o In event that you cancel in 30 days, pay band o Cancel the wedding, cancel the band o Were damages reasonable? o Can band prove there were damages? (people and money they turned down cause they planned to play at your wedding) instead of suing you for all the money they turned down Equitable Remedies o Rescission Contract is canceled and parties are put back at starting point “cancel” o Restitution When contract is canceled, and assets have been exchanged Assets are returned to original owners o Specific performance Unique item (land, personal services, etc) UA plans to sell bidgood, then changes mind Buyer cannot find another bidgood Sued and demanded to sell the building Hire beyonce for birthday party She cancels, cannot be substituted for “another beyonce” Sued and demanded to play at party o Reformation Modify original contract Available if fraud or mutual mistake Can cancel or reform contract to an agreement If written contract doesn’t properly reflect verbal contract, can update Non competes Waiver of Breach o “waves” away obligation to perform for a period of time o Consequences If they wave the breach, they cannot sue you Still have to adhere to rules of contract If continue to wave breach, then there is no breach of contract Cannot wave own negligence
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