1. 2 but first some additional but important definitions and legal concepts
TRANSCRIPT
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BUT FIRST
SOME ADDITIONAL BUT IMPORTANT
DEFINITIONS AND LEGAL CONCEPTS
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CONTRACTS THAT VIOLATE A STATUTE
ARE ILLEGAL
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WHERE A LICENSE IS REQUIRED, NORMALLY, A CONTRACT MADE BY AN UNLICENSED PERSON IS
ILLEGAL
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CONTRACTS THAT VIOLATE PUBLIC POLICY ARE
PROHIBITED
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AN EXCULPATORY CLAUSE IS GENERALLY
UNENFORCEABLE WHEN IT ATTEMPTS TO EXCLUDE AN
INTENTIONAL TORT OR GROSS NEGLIGENCE
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AN EXCULPATORY CLAUSE IS GENERALLY
UNENFORCEABLE WHEN THE AFFECTED ACTIVITY IS
IN THE PUBLIC INTEREST
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AN UNCONSCIONABLE CONTRACT IS ONE THAT THE COURT WILL NOT ENFORCE BECAUSE OF FUNDAMENTAL
FAIRNESS
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A CONTRACT SIGNED BY A MINOR IS VOIDABLE BY THE
MINOR
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CONTRACTS ENTERED INTO BY MENTALLY IMPAIRED PARTIES ARE VOIDABLE
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A CONTRACT ENTERED INTO UNDER DURESS IS
VOIDABLE
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CONTRACTS WHICH MUST BE IN WRITING
• Interest in real estate
• Agreements that can not be performed within one year
• Promise to pay the debt of another
• Promise made by executor of an estate
• Promise made in consideration of marriage
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WHEN CONTRACTS MAY NOT BE ASSIGNED
• When assignment substantially effects obligor’s rights or duties
• If forbidden by law
• Is precluded by the contract
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CONTRACTUAL DUTIES WHICH MAY NOT BE ASSIGNED
• Delegation would violate public policy
• The contract prohibits delegation
• The obligee has a substantial interest in personal performance by the obligor
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PERFORMANCE
• Strict performance
• Substantial performance
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GOOD FAITH
Every contract imposes upon each party a duty of good faith
and fair dealing in its performance and enforcement.
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BREACHING THE CONTRACT
• Someone breaches a contract when he fails to perform a duty without a valid excuse.
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BREACH
When one party breaches a contract, the other party does
not have to perform and is discharged from their
obligations.
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“The flexible powers of a court should enable it to craft a just remedy for almost any breach of
contract.”
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REMEDY
A remedy is the method a court uses to compensate an injured
party when a contract is breached.
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INTEREST
A legal right in something.
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IDENTIFYING THE “INTEREST”
• Expectation Interest
• Reliance Interest
• Restitution Interest
• Equitable Interest
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COMPENSATORY DAMAGES
Compensatory damages are to compensate for the breach of
the contract.
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CONSEQUENTIAL DAMAGES
Consequential damages are those resulting from the
unique circumstances of this injured party.
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INCIDENTAL DAMAGES
Incidental damages are the relatively minor costs incurred
when the injured party responds to the breach
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PUNITIVE DAMAGES
Punitive damages are designed to punish someone for reprehensible behavior in breaching a contract.
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LIQUIDATED DAMAGES
A liquidated damages clause, is a provision stating in
advance how much a party must pay it if it breaches.
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ENFORCEMENT
A court will generally enforce a liquidated damages clause if :
(1) at the time of creating the contract it was very difficult to estimate actual damages, and
(2) the liquidated amount is reasonable.
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SELLER’S REMEDIES
When the buyer breaches, if the seller acts in good faith, she will
be awarded the difference between the original contract
price and the price she was able to obtain in the open market.
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BUYER’S REMEDIES
When the seller breaches, the buyer will be awarded the
difference between the original contract and her cover
(replacement) price
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OTHER EQUITABLE INTERESTS
• Specific Performance
• Injunction
• Reformation
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SPECIAL ISSUES OF DAMAGES
• Mitigation of Damages
• Nominal Damages