Glossary of Contracts - Definitions
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- Accord and satisfaction
- settlement of an existing claim under which parties agreed that one of them will give, and the other will accept a lesser performance than that originally claimed by the creditor.
- Anticipatory repudiation
- K c/n/b breached before the time of performance is due. HOwever, if before his performance is due, a party makes it clear by unequivocal words or unambiguous volunary conduct that he w/n perform as promised, or will materially breach the K when the time for performance arrives, he repudiates in anticipation of performance. The other party m/ react immediately and pursue relief for breach.
- Transfer of a contractual right -- transfer of rights and duties under a K.
- Standard provisions employed commonly in contracts of a particular kind, and often set out in preprinted standard form contract.
- Consequential damages
- Losses suffered by the victim of a breach going beyond the mere loss in value of the promised performance, and resulting from the impact of the breach on other transactions or endeavors dependent on the K.
- Course of dealing
- Where parties have entered into a number of successive transactions of a similar kind, the transactions that occurred before the K in question are referred to as course of dealing.
- Course of performance
- Conduct of parties in performing a K after is execution
- Transfer of contractual duties
- Upon breach, victim m/ either sue on the K for expectation or reliance damages, or m/ elect to act as if no K exists, and sue for restitution under a theory of unjust enrichment. Disaffirmance is the P formal abandonment of the K in order to ground the unjust enrichment claim.
- Economic waste
- If damages for rectifying a breach are disproportionate to the victim's true loss, the ct has the discretion to adjust them downwards to more accurately reflect the actual loss. It w/b an unfair forfeiture to compel the breacher to pay damages disproportionate to actual loss.
- Efficient breach
- Breach that makes the D better off w/o making the P worse off. If D cost to perform K w/ exceed the benefit that performance w/ give both parties, the D m/ save enough $ by breaching to pay expectation damages to the P and still come out ahead.
- Expressio unius est exclusio alterius
- Rule of interpretation under which the listing of a string of specific things, not followed by a general term, is tken to exclude unlisted things of the same kind.
- Ejusdem generis
- Rule of interpretation under which specific words limit the meaning of general words with which they are associated.
- Force majeure
- A force beyond the control of parties, such as a natural disaster or war - clause in a K is one that releases a party from performance if that performances is rendered impracticable as a result of such uncontrollable event.
- Objective - whether or not the party in question does actually foresee the event, it is foreseeable if it c/b conceived of by a reasonable person.
- Four corners rule
- Rule of interpretation that requires the meaning of a document to be ascertained with reference only to the language used in the document itself w/o recourse to any extrinsic evidence (of the context in which the document was executed)
- Misrepresentation of fact, opinion or intention, made with knowledge of its falsity and intent to mislead.
- Frustration of purpose
- K purpose is frustrated where after an unforeseen event occurs, which so changes the curcumstances surrounding it, that the K underlying purpose, as reasonably understood by both parties, is defeated. Point of K has disappeared. Grounds for termination.
- Good faith
- Actual honesty and fair dealing, with an absence of intent to act wrongfully.
- Older, narrower doctrine - performance under K m/b excused as impossible if the K contemplatedthat performance to be dependent on the continued existence of a person or thing and w/o fault of the person claiming excuse, the person died or thing was destroyed after the K execution.
- Paryt m/b excused if an unforeseen supervening event, occuring after formation, and not caused by the fault of the party claiming excuse, defeats a basic assumption on which the K was made. Party m/ show that the unforeseen event imposes a significant burden on him, beyond any risk that he expressly or impliedly assumed.
- Incidental damages
- Costs and expenses incurred by the victim of a breach in attempting to deal with it and in taking action to seek a substitute transaction or to curtail losses.
- In pari delicto
- An illegal K is not enforceable, but where one of the parties has performed under teh K, he d/h a restitutionary claim for the return of what was given to the other. But if the party claiming restitution is as much to blame in breaking the law as the party who received the performance, the ct has the discretion to leave the parties as it find them and to refuse to grant restitution.
- Integrated writing
- Totally integrated if it clearly and unambiguously expresses all the terms agreed to by the parties, and is intended by them to be a complete and final expression of all the terms of their K. If the written record d/n fully and finally incorparate all terms it is partially integrated.
- Liquidated damages
- Parties m/ wish to avoid disputes and uncertainty over damages if a breach occurs, m/ include a term in the K that seeks to fix in advance the amount of damages to be paid if a breach occurs. Enforceable provided that it was fairly bargained for, was a genuine attempt to forecast probable loss, and is not disproportionate to the actual loss ultimately suffered. If it d/n meet the standards, it is treated as a penalty and is unenforceable.
- Lost volume
- If S has capacity to supply the full demand for those goods or services, a breach by one buyer is not substituted for by a subseq sale of the goods or services of another customer who w/h bought the goods or services in any event. Breach has caused a loss in the volume of S sales and c/b compensated for by an award of lost profits.
- Material - important component of the K, so central to the values exchanged that it is a fundamental basis of the bargain b/w the parties.
Material breach - violation of a party's obligations under the K, so serious that it defeats the other party's reasonable expectations under the K by substantially depriving her of the value of the transaction.
- Merger clause
- Provision in a written agreement declaring that the writing contains all the terms agreed upon by the parties and that no terms, other than those expressed in the writing h/b agreed to. Purpose is to merge all the agreed upon terms inot the writing so that the writing becomes the full and complete record of what was agreed to.
- Assertion not in accordance with the truth. If made with knowledge of its falsity and intent to mislead, it is fraud. If not, it m/b negligent or innocent.
- An error concerning a fact existing at the time of K.
Mutual - if common, shared assumption of the parties
Unilateral - if error concerns a fact for which only one of the parties is responsible.
- Mitigation of damages
- avoidance or reduction of loss following a breach of K.
- Noscitur a sociis
- Rule of interpretation under which the meaning of each individual word in a series is affected by and affects the meaning of the other words in that series.
- K under which an existing contractual duty is discharged and a new one is substituted. New K m/ add a party who was not a party to the original K.
- Parol evidence
- Evidence of alleged terms not included in the written record of agreement, but claimed by one of the parties to h/b agreed to orally before or at the time of execution of the K, or in a prior writing.
- Partial breach
- Breach that is not, or h/n yet become significant enough to qualify as a total and material breach. Party who has substantially performend commits a partial breach, but even where performance is not substantial and the breach is potentially material, it remains a partial breach as long as there is a prospect that the breach w/b cured.
- Provision in a K that is designed to impose a burden or punishment on a party for breaching, beyond any actual or expected loss that m/b suffered by the victim, not enforceable.
- Promissory estoppel
- Discretion to enforce a non-contractual promise made with the intention of inducing reliance, and justifiably relied on by the promisee to her detriment.
- Adequate assurance of performance
- If insecurity is justified, the insecure party m/ demand, and if none is given, m/ treat the failure to furnish as repudiation.
- Quantum meruit
- market value of services
- Specific performance
- Directs D to render the contractual performance as promised - equitable remedy and is the exception.
- Substantial performance
- While not fully in compliance with the K, breach is not material and P m/n use it as a ground for rescinding the K, but is confined to claiming monetary compensation for the shortfall in performance.
- Termination of K
- Where a K h/b materially and totally breached, the victim of the breach m/ terminate the K, bringing the rel't to an end for purposes of any outstanding future performance, and sue for damages.
- Third-party beneficiary
- Person who is not a party to the K, but upon whom the parties intend to confer the benefit of performance together with an independent right to enforce that performance.
- Intended beneficiary
- Party on whom independent right of enforcement is conferred.
- Incidental beneficiary
- Stranger to the K that acquires an incidental benefit from the K - no right to sue on K.
- Total breach
- Breach that is both material and incurable, entitling the victim to rescind the K and claim full expectation relief.
- M/ refuse enforcement of a term or K that shocks conscience. Normally consists of both a procedural element (unfair bargaining) and a substantive element (unfair terms)
- Usage/Custom of trade
- Customs and established practices in a particular trade, industry or market.
- Ut res magis valeat quam pereat
- Rule of interpretation under which a ct resolves uncertainty in favor of a meaning that is lawful, reasonble, and congruent with public policy
- Where party knowingly and purposefully acts to breach the K - ct m/ limit recovery.
- Types of CL Damages - UPS ICE
- Unjust enrichment
- Uniform Commercial Code - governs the sale of goods
- UCC - 2-105 - goods include movable things other than $ and various intangible rights.
- Buyer's rights - UCC codes applicable:
- 2-601 - rights on improper delivery - perfect tender rule
2-602- rejection w/in reasonable time
2-606 - acceptance of goods
2-607 - effect of acceptance
2-608 - revocation after acceptance
- Seller's rights - UCC applicable:
- 2-504 - shipment by seller
2-508 - replacement
2-605 - waiver of buyer's objections
- Anticipatory repudiation - UCC applicable:
- 2-609 - right to adequate assurances
2-610 - anticipatory repudiation
2-611 - retraction
- Installment contracts - UCC applicable:
- 2-612 - breach
- Buyer's damages and remedies - UCC applicable:
- 2-711 - damages in general
2-712 - buyer m/ cover
2-713 - nondelivery or repudiation
2-715 - incidental and consequential damages
- Seller's damages and remedies - UCC applicable:
- 2-703 - remedies in general
2-706 - seller's resale rights
2-708 - non-acceptance or repudiation and lost volume
2-709 - action for price
2-710 - incidental damages
2-704 - unfinished goods
- Third party beneficiary - UCC applicable:
- Parol evidence - UCC applicable:
- 2-202 - final written expression
2-208 - priorities of analysis
- Impracticability - UCC applicable:
- Liquidated damages - UCC applicable:
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