LAW 122 Week 10 Chapter 11_ DisCharging a Contract; Remedies.docx

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Week 10- Chapter 11: Discharging a Contract; Remedies Discharge (CH 11) Discharge by performance Discharge by agreement (another contract) Both parties agree to end the contract Discharge by breach One party has a significant failure to withhold the contract rules Two ways this can go Breach of condition Breach of warranty Frustration 9 (Ch 11) Remedies (Ch 12) 1.Discharging contract through performance A contract can be discharged through the performance of its terms (obligations) Rule: parties must perform exactly as the contract requires Exceptions: 1. Later Performance is still performance Time of the essences caused, time is to be strictly performed on time that is a breach of a contract 2. Substantial performance is still performance Exception: Entire Contract Clauses (no part of the price is payable unlessall of the work is done) Builders & Doorknobs Facts: You contract for the builder to build ten houses to full completion. Builder builds the ten houses and completes everything but the doorknobs. Can you treat the contract as non-performed and refuse to pay until doorknobs are on? No this is an example of a contract that is substantially performed. You are entitled to claim against the contractor for damages for you or someone else to do install the doorknobs. Set off clause might let you deduct the amount to pay the contractor. Case #5 2.Discharge by Agreement 1)Give fresh consideration(accord & satisfaction) 2)Make a contract under seal(release)Example: Parties agree (accord) that one party will give the other some new consideration (satisfaction) to give up right to performance Example: Parties agree (under seal) to ‘release’ each other from their obligations ( without fresh consideration) Arises where one party has
Arises where one party has completedtheir contractual promise and agree to discharge the second party from the further performance if the second party gives some new consideration Example: Selling a car for $500 on theselling day buyer only has $450 and a textbook for next semester. If you agree to take the $450 and a textbookis accord & satisfaction completedtheir contractual promise, and agrees to dischargethe other party from further performance of the contract.

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