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  • >> Chapter 9, we're going to look at contract performance,

  • breach, and remedies.

  • Typically, only the original parties to a contract

  • have the rights and liabilities under that contract.

  • There are some exceptions that we talk about in this chapter.

  • Assignment, delegation,

  • and third party beneficiary contracts.

  • Assignment is a transfer of contractual rights.

  • Later, we'll talk about delegation being a transfer

  • of contractual duties.

  • The parties in assignment--

  • the assignor is the one who makes the assignment.

  • The assignee is the one the right is assigned to.

  • An obligee is somebody who is owed a duty or obligation.

  • And the obligor is the one who owes that duty or obligation.

  • So an assignee can assign rights or things

  • they're gonna receive in a contract to some third party,

  • and those rights then pass to that third party--

  • the assignee-- who has a right to demand performance

  • from the original party to the contract--

  • specifically the obligor.

  • Assignment is prohibited when there's a law against it,

  • when it's personal in nature,

  • when it would materially change the rights or duties

  • of the obligor,

  • or when it will significantly change the risk or duties

  • of the obligor.

  • Once an assignment is made, the assignee should notify

  • the obligor of the assignment.

  • There's no real duty to do this notice

  • but it's in the assignee's best interest.

  • One of the issues that comes up is if notice isn't given,

  • who has priority?

  • What if the assignor assigns the same rights

  • to two different people?

  • The obligor can discharge his obligation by performing

  • to the assignor.

  • As we mentioned, delegation is contractual duties delegated

  • to a third party.

  • Delegator is the one making the delegation.

  • Delegatee is the one the delegation is made to.

  • The effect is that the delegation is enforceable.

  • The obligee must accept performance

  • from the delegatee to whom the delegate--

  • the duties are delegated.

  • However, the valid delegation doesn't relieve the delegator

  • of the duties under the contract.

  • In other words, if you contract with somebody

  • and you delegate those duties to someone else,

  • you're still responsible for ensuring they get done.

  • Duties that can't be delegated-- if performance depends

  • on the personal skills or talents of the obligor,

  • some special trust relationship in the obligor,

  • a third party performance will materially vary

  • from the contractual expectations,

  • and when a contract expressly prohibits delegation.

  • Third party beneficiaries exist

  • when the original parties to the contract

  • intend to benefit someone else

  • who is not a party to the contract at the time

  • of contracting.

  • Makes both parties promisors.

  • A third party's rights are vested

  • when a third party demonstrates express consent

  • to the agreement,

  • when a third party materially alters his or her position

  • in detrimental reliance,

  • or when the conditions for vesting are satisfied.

  • For example, in a life insurance policy, once somebody dies,

  • then a third party beneficiary's rights would vest.

  • A couple intended beneficiaries--

  • a creditor beneficiary is somebody who benefits

  • from a contract in which the promisor

  • promises the promisee

  • to pay a debt the promisee owes to a third party.

  • A donee beneficiary is when a contract is made

  • for the express purpose of the promisor giving a gift

  • to a third party, the donee.

  • A donee can sue the promisor directly if the promisor

  • breaches the contract.

  • As we mentioned, intended beneficiaries

  • can bring an action to enforce the contract.

  • An incidental beneficiary is somebody who is not intended

  • to benefit at the time of the contract

  • and they can't sue to enforce the contract.

  • Let's look at contract discharge.

  • There are different ways a contract can be discharged.

  • It could be by condition, by performance,

  • by agreement of the parties in operation of law.

  • A condition would be a possible future event--

  • the occurrence or non-occurrence

  • of which would trigger performance of legal obligation

  • or terminate an existing obligation.

  • In other words, it's a condition that would cause somebody

  • to have an obligation to continue in a contract

  • or would cause them to be able to avoid a contract.

  • And condition precedents-- subsequent and concurrent--

  • just has to do with the timing of that condition.

  • So sometimes, there's a condition that precedes

  • a party's obligation to perform.

  • Discharge by performance--

  • complete performance would be a perfect performance,

  • where the parties do exactly everything that's required.

  • That's fairly rare.

  • What the court is looking for is substantial performance.

  • A party who performs substantially

  • and in good faith can enforce the contract.

  • Basically, they confer most of the benefits.

  • The benefits or performance doesn't vary greatly

  • from what was promised.

  • This is what we would call a "minor breach."

  • It would entitle the other party to damages.

  • You also could have a contract that requires satisfaction

  • of someone.

  • We call those a "satisfaction contract."

  • When the contract is personal, the subject matter is personal,

  • and actual personal satisfaction is required.

  • Otherwise, we're looking at a reasonable person's standard.

  • In other words, somebody's satisfaction

  • couldn't be unreasonably withheld.

  • We'll look at material and minor breaches of contract.

  • A breach of contract generally is the non-performance

  • of a contractual duty.

  • That breach is material when performance

  • is not substantial and the non-breaching party

  • is excused from performance.

  • They're also entitled to damages.

  • If it's a minor or non-material breach, the duty to perform

  • is not excused on the non-breaching side

  • and they have to resume their performance.

  • Anticipatory repudiation

  • means you think there's gonna be a breach.

  • Before the performance is due, one of the parties

  • might refuse to perform or appear

  • as if they're not going to be able to meet

  • the contractual obligations.

  • This would be treated as a material breach.

  • If the other party admits they're not going to be able

  • to perform-- and this would entitle the non-breaching party

  • to bring an action immediately for damages

  • versus having to wait to see if the other party performs--

  • but notice by that repudiating party,

  • the party who is leading to the anticipatory repudiation,

  • would restore the original obligation.

  • In other words, if I told you

  • that I'm going to breach the contract

  • but before you changed your position,

  • I told you that I am now able to fulfill it,

  • then you would need to wait.

  • Discharge by agreement could be by rescission, novation,

  • or accord and satisfaction.

  • Rescission means that the parties agree

  • to undo the contract.

  • Novation would be for the old contract to go away,

  • a new contract to replace it that contains a party

  • from the old contract and a new party.

  • Sometimes this is called "substitution."

  • And accord and satisfaction

  • would be where there is a contract

  • but somebody offers to perform something different

  • and the other party says that would be sufficient.

  • So example-- I owe $10,000 but I offer to pay $8,000

  • and the other party takes $8,0000 now

  • versus waiting to try to collect $10,000.

  • That would be an accord and satisfaction.

  • The law could discharge a contract.

  • Perhaps it gets altered by one of the parties.

  • The other party-- who's innocent--

  • would be discharged from that.

  • Statute of limitations-- if somebody waits too long to sue

  • under a breach of contract,

  • then the contract would be discharged--

  • it wouldn't be able to recover.

  • Or bankruptcy is a way of discharging contracts

  • by operation of law.

  • Sometimes, it's impossibility--

  • in a situation where it's not foreseeable.

  • This could occur by death or incapacity of the parties,

  • the subject matter of the contract's destroyed,

  • or the law changes that makes the contract illegal.

  • It could be temporary impossibility

  • that suspends performance

  • or a situation where it's not impossible

  • but it's commercially impractical

  • and, again, the performance would need

  • to be extremely difficult or costly

  • and not really foreseeable by the party

  • at the time of the contract.

  • Or frustration of purpose.

  • Something intervenes, makes it impossible for the parties

  • to attain the purpose they had in mind

  • when they formed the contract.

  • For different types of damages in a contract--

  • compensatory typically is the difference

  • between a value of what was promised

  • and what was actually performed.

  • Incidental damages would be damages in addition

  • to compensatory damages that could be linked

  • directly to the breach,

  • and sale of goods is the difference

  • between the contract price and the market price.

  • And a sale of land-- perhaps the party

  • would ask for a specific performance

  • because they want the land versus the damages.

  • Consequential damages would be foreseeable losses

  • that a breaching party is aware or should be aware of.

  • Punitive damages would be to punish the other party--

  • this is not common unless there's some type of tort.

  • For example, fraud involved in nominal damages

  • would be like a dollar when there's not actual losses

  • but technically there's a breach.

  • Mitigation damages is the innocent party

  • being required to reduce their damages if possible.

  • Liquidated damages would be the parties agreeing in advance

  • to pay a specific amount upon breach.

  • The court will enforce those

  • unless they're an unreasonable penalty.

  • Generally, the court won't enforce those--

  • the questions that the court ask are listed there.

  • There's also equitable remedies.

  • Rescission, restitution, specific performance

  • and reformation.

  • We've talked about rescission generally--

  • you know, backing out of or undoing the contract.

  • Restitution would be returning goods, property, or money.

  • Specific performance would be making the party

  • perform the acts they promised in the contract--

  • and reformation would be to rewrite the contract

  • to reflect the party's intentions.

  • This is common in a situation where there's fraud

  • or mutual mistake.

  • It could be a quasi contract--

  • and we've talked about that before in terms of it

  • being a contract that the court creates

  • when there's not a contract--

  • and the requirements are that there's some benefit

  • conferred to the other party,

  • the other party takes that benefit,

  • the party expects to get paid when they provide that benefit,

  • and letting the other party keep the benefit

  • without paying would--

>> Chapter 9, we're going to look at contract performance,

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第9章 (Chapter 9)

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    Amy.Lin に公開 2021 年 01 月 14 日
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