Business Law Chapter 17

Business Law Chapter 17 - Business Law Chapter 17...

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Business Law Chapter 17 Performance and Discharge Discharge - Discharge – a party is discharged when they have no more duties under contract - Most contracts are discharged by full performance - Sometimes parties discharge a contract by agreement o Parties may agree to rescind a contract – to terminate contract – by mutual agreement Defenses that Discharge - Claims of commercial impractibility are difficult to win - The parties could decide that one person’s obligation/duties will be performed by someone else, a modification would now be called a NOVATION. Conditions - Parties put conditions in a contract – condition – an event that must occur before a party becomes obligated under contract. How conditions are created? Express Conditions - Parties may expressly create a condition – NO SPECIAL LANGUAGE is necessary to create condition; phrases such as “provided that” indicate a condition – but those words are not necessary as long as party INTENDED to create condition, it is enforceable in court. o Because informal language can create a condition, parties can contend if they intended it or not. Implied Conditions - At times party say nothing about a condition, but from their agreement they have implied one. o IE: A rents an apartment to B telling B that A will fix any problems. It is implied that B will notify A of any problems in the apartment. Types of Conditions
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- Courts divide conditional clauses into 3 categories – condition precedent, condition subsequent, and concurrent conditions o The key to all conditional clauses: if the condition does NOT occur, one party will probably will be discharged without performing - Condition Precedent- an event must occur BEFORE a duty arises - Condition Subsequent – condition must occur AFTER duty. If condition does not occur, duty is discharged. - Precedent/Subsequent Distinction – who cares? – the difference is important because it tells us WHO MUST PROVE whether the condition occurred. o In condition precedent the plaintiff has burden to prove that condition happened o In condition subsequent the defendant has burden to prove that condition happened - Concurrent Conditions – both parties have a duty to perform simultaneously. Each performance is the condition for the others performance - PUBLIC POLICY: at times a court will refuse to enforce express condition on the grounds that it is unfair and harmful to general public. Court might agree that parties created a condition clause, but conclude that permitting its enforcement would hurt society. Ex: pg 387 Performance - The more complex a contract, the more certain that at least one party will perform imperfectly -
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This note was uploaded on 06/29/2011 for the course MGT 3000 taught by Professor Murrmann during the Spring '11 term at Virginia Tech.

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Business Law Chapter 17 - Business Law Chapter 17...

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