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Class_4-_AFM_231posted - Class 4- AFM 231 Contract Law...

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Class 4- AFM 231 Contract Law
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Discussion Points Brief Review Negotiated Contracts Managing Risk Challenging a Contract Duress, Mistake, Etc. Terminating a Contract Legal reasons to terminate Failure to Perform (Breach) Classification of breach Remedies
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Negotiated Contracts- Ambiguity It is not uncommon for contract terms to have interpretation challenges. Ambiguity may be obvious on reading or only appear from larger context (may/may not be poor drafting) “land to be free of defects” p. 101 “The premises shall include use of the parking located at the rear of the store for customers, on the understanding that such parking shall be shared with the vendor with regard to his operation of the bakery.” p. 162
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Contracts- Managing Risk In practical terms: this is very important. Why? Most common event: things change over course of contract. Think ahead and incorporation means of handling it through contract. How? Rise and fall clauses Formula Provision for reopening contract under spelt out circumstances. Conditional contracts – fairly obvious. Either before (precedent) ie no binding contract till X happens eg “subject to financing”. Or after (subsequent) ie binding contract but ends if Y happens eg contract of supply of precious metal ends when gold prices rise above a certain amount.
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Contracts- Managing Risk Exemption Clause- Again very important. Why? In every contract and generally will apply. Liquidated damages clause: specialized form. What is it? Note: don’t get greedy. What happens if you do? (Add rule to earlier list: courts may eliminate a clause but they won’t rewrite it.). Rule of thumb (p. 155): In standard form contracts, you must make the user of the contract aware of any very restrictive clause or unexpected clause and especially if they are limitation or exclusion clauses. The more restrictive, the more important to notify.
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Class_4-_AFM_231posted - Class 4- AFM 231 Contract Law...

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