Legal Environment Lecture Notes Unit 2

Legal Environment Lecture Notes Unit 2 - Legal Environment...

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Legal Environment Unit 2 Chapter 5 I. Conditions a. *Condition Precedent of a Contract i. We have a deal, but its not an obligation unless something happens ii. No deal unless specified something happens iii. Example: 1. Contract for purchase of real estate a. Contract to buy is contingent upon buyers ability to receive financing b. Does not mean breach of contract if financing is not secured – it is just a failure to meet precedents II. Performance a. Substantial performance doctrine i. Decide to purchase acre of land and build a house ii. Substantial performance doctrine states that in the event of a change in performance (non-conformities) if the builder has substantially performed, then the other side cannot get out of it 1. For example, if you are building a house, and one light is a millimeter lower than another in the same hallway, that is not justifiable reason for breach of contract iii. Close enough is good enough! 1. Can’t get out of a contract just because of a small difference iv. Regulations: 1. Builder must be in good faith (failure to perform must be involuntary 2. ? b. Satisfaction Document i. Must be satisfied or no pay 1. Example: commission to paint a portrait – if the person doesn’t like it, the artist does not have to be paid if that was one of the terms of the contract ii. Two categories 1. Subjective standard in consumer cases a. Non-satisfaction is not questioned in good faith when satisfaction is guaranteed by producer b. “Reasonable person” standard is not in effect 2. In business environment a. Objective standard , or reasonable person standard is in effect c. Time for Performance i. Must be completed by… ii. What constitutes a breach?
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1. Depends on totality of circumstances 2. Time may or may not be critical, but stating “time is of the essence” in contract suggests to judge that time is of critical importance 3. Essential date: means performance after the date renders the deal no good a. Wedding b. Stock trade c. Pre-game party 4. Time doesn’t always matter a. Textbook publication review deadline III. Discharge by agreement or operation of law a. Agreement to discharge = rescission = mutual agreement i. Nothing prevents anyone from mutually agreeing to cancel contract ii. Statement of “non-rescission” in contracts cannot be upheld in law b. Operation of Law – a provision in law allowing for the void of a contract i. Statute of limitations 1. Only limited amount of time to sue for breach 2. Differs from state to state/case by case 3. If a contract has been breeched, but a new contract has been established, the statute of limitations resets if it had previously expired. ii. Bankruptcy – contracts are void under bankruptcy laws 1. Partial payments after claiming bankruptcy does not revive debts. iii.
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This note was uploaded on 04/25/2008 for the course WCOB 1012 taught by Professor Norwood during the Fall '08 term at Arkansas.

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Legal Environment Lecture Notes Unit 2 - Legal Environment...

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