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Contracts Review Notes
Capacity
Capacity: Any questions? (None)
Mistake
Mistake: Questions about how it works? (None)
Unilateral vs. mutual mistake.
Misrepresentation and Nondisclosure
Misrepresentation and Nondisclosure: Questions?
Cases mentioned:
Late lobby Oregon case
Folks v Murray (dance school case)
Hill v Jones (housing case)
Question: Can mistake and misrepresentation be connected to frustration or impracticability?
Misrepresentation: Someone says something untrue.
Mistake: Both parties assume something to be true, but it's wrong.
Frustration and impracticability usually involve unexpected new events after contract formation.
Misrepresentation and mistake are about what happens before the contract.
Duress and Undue Influence
Duress and Undue Influence: Any questions?
Unconscionability
Unconscionability: Any questions?
Illegality and Public Policy
Illegality and Public Policy: Any questions?
Parole Evidence Rule
Parole Evidence Rule: Questions?
Question about the connection between letters of intent and the parole evidence rule.
If a letter of intent is a negotiating document, is it integrated? Is it a complete and final definitive statement of the contract terms?
Letters of intent usually contain a nonbinding term sheet as a negotiating document.
If an LOI is well-drafted, it should make clear that parties can walk away and don't have to negotiate. It remains preliminary and not definitive.
Explanation of the bootstrap rule:
A party alleges an oral side deal in court, despite a written agreement.
The judge believes the party and uses the allegation of an oral agreement to prove the written agreement was incomplete.
This allows the oral agreement to modify the contract. It's a circular, catch-22 situation.
Supplements vs. Contradicts:
If the writing says x, y, and the oral thing says z, unless z is basically not x or not y, the court will treat it as a supplement.
However if the oral addition effectively reduces x, this would be a contradiction.
Norton Armco & Indefiniteness
Question: if a contract has indefiniteness, like the Norton Armco, and we said, like, if you put a variable in there, is it considered a completely integrated agreement, or is it just partially since you didn't actually like, you don't have that material price?
A variable term that is linked to an external index (e.g., CPI) is not indefinite because it's objectively identifiable.
An agreement to agree on a price in the future is indefinite and unenforceable unless some external criteria feeds the answer.
Negotiating in good faith towards a price means making reasonable commercial arguments.
External Sources: Course of Performance & Course of Dealings
Course of dealings: Multiple deals over time between the same parties.
Course of performance: What parties have done so far within one particular deal.
Duty of Good Faith
Connect the duty of good faith to a specific obligation, effort, or action.
Question: Do you have a duty to negotiate in good faith?
The baseline is that there is no duty to negotiate in good faith unless the parties agree to it.
Letters of intent raise the question of whether parties entered into an agreement to negotiate in good faith.
Cases mentioned:
Channel Homes (yes)
TIAA/Chicago Tribune (yes)
Schwanbeck (no)
Enpro (no)
If there's an obligation to negotiate in good faith, it's not an agreement to contract but an obligation to negotiate toward such an agreement.
If parties agree to negotiate in good faith, they must make fair, reasonable arguments and cannot use pretextual arguments.
Unless a clear statement or intention to negotiate in good faith, there is no duty to negotiate in good faith.
Courts are aware of the danger to start finding agreements to negotiate in good faith. They are aware of the dangers, because there's this general rule that says you do not have an you do not have a duty to negotiate in good faith. You you don't have a duty to negotiate. As American law, you don't have that.
No-shop clause: Suggests an intention to negotiate in good faith.
The key thing about the mutual agreement to negotiate in good faith is that it limits the grounds on which you can walk away.
Does the breakdown of the negotiations have to be over a material term?
Probably, yes.
Warranties
Express or implied?
Conditions
Express conditions, implied conditions.
Species of implied conditions: sequence of performance (constructive conditions of exchange).
Substantial performance, material vs. immaterial breach.
Defensive Remedies for Breach
If the other party commits material breach (fails to perform or renders defective performance), you can suspend your own performance.
Anticipatory Repudiation:
Before performance is due, one party clearly states they won't perform (Hoxtary de la Tour).
If it's waffly, it may be reasonable insecurity, allowing the other party to demand reasonable assurance.
Restatement 235(2): When performance is due, any nonperformance is a breach.
Anticipatory repudiation is when you say you won't perform before it's due or take actions that make performance impossible.
Correct terminology is needed to describe whether someone has repudiated (clear, unambiguous statement) or merely given grounds for insecurity.
You will want to learn the back and forth in the correct terminology to be used. Does somebody actually repudiate. That has to be a clear, unambiguous statement, the anticipatory repudiation. Or have they merely waffled in a way that constitutes giving grounds, you know, reasonable grounds for insecurity? Then the other side doesn't have to, but has the right to demand reasonable assurances.
Frustration and Impracticability
Impracticability and frustration.
No questions. Move on.
Damages
Expectation, reliance, and restitution damages: Plaintiff will usually specify which they want. * Sort of, expectant expectancy damages, that's your biggest one. That's your normal. If some reason you didn't wanna go that route, you could request the other. In pretty much any case I can think of, you know, reliance damages is like a subset of expectation damages. Like, if you do expectation damages and you can't show some speculative profit in the future, you'll still get whatever your expenses and costs and and harm was just like under reliance. So, you know, it's like, why would you ever bother saying reliance rather than expectation? I don't know a lot, honestly.
Expectation Damages: Normal and Biggest
Restitution: ask for it when you want to get back what you put in
You get one or the other.
Difference Between Expectation, Reliance, and Restitution vs. Direct, Indirect, and Consequential:
Expectation is direct, indirect, and consequential, minus loss avoided.
Reliance: money spent or something given up, often will be the same expectation damages.
If you have a binding LOI without a breakup fee, can you collect reliance damages if the other party walks?
Yes, for expenses like lawyers and accountants.
Divisible and Indivisible Contracts:
Divisible Contract Question: If it's a divisible contract, are all the promises considered dependent covenants?
The first is supposed to go first before the other happens.
Their performance with constructively implicitly condition upon their not having been a first material breach by the other party. That is by the other party having substantially performed when due. Only the other party, substantially performing when you said is the implied, the constructive condition, lighting up duty of the second party to perform if the sequential rather than concurrent.
Concurrent: Both parties tender. (Showing up, ready, willing, able, here I am)
Sequential: Johnny has to perform first, then I pay, and only once he has substantially performed when due, that's what lights up my duty to pay.
Restatement section two thirty five, two 30 five sub two Failure to perform when due.
Mental Anguish & Punitive Damages
Mental anguish, pain and suffering, and punitive damages.
Third Party Interests
Assignment and Delegation:
For the right to assignment, do you always, unless you're you're assigning transferring that right to someone else that's gonna adversely affect the other party, do you always just inherently have, like, and assign the right to assign?
Generally, the presumption is you can assign your rights under a contract to receive payment, especially payment payment. But it's the delegation of your duty, somebody else is gonna do your part. That's the tricky one because that can really have an adverse effect on the other party.
The reason you have to put void in there is because you automatically came to had assignment, right.
Presumptively, rights to receive under a contract are assignable.
Presumptively, every presumptively rights to receive under a contract are assignable.
Anti-assignment clause.
Third Party Beneficiaries:
Creditor beneficiaries, donee beneficiaries.
Cases mentioned:
Virgin Islands case with the landlord and Kmart (Balfour Beatty case) - Creditor beneficiary case
Hale v Gross (lawyer setting up testamentary documents) - Donee beneficiary case
How do you, like, prove you're a beneficiary like, through the parole evidence rule?
Someone hires to do the benefit of which is gonna to pay in satisfaction with your pre-existing contractual duty to Pete. Pete is a contract creditor, not creditor in the sense, but you owe him money, but you owe him whatever it is, but you owe him something under an existing contract. He's a contract creditor.
The Pete and Wedding Hypothetical: Is the Bartender the Crdditor?
How does Pete show damages?
Review of Indefiniteness, Open Terms, Variable Terms, Agreements to Negotiate in Good Faith, Letters of Intent
Capacity
Capacity: Any questions? (None)
Factors Affecting Capacity
Age:
Minors (individuals under the age of 18) generally lack the capacity to enter into contracts.
Contracts entered into by minors are voidable at the option of the minor, meaning the minor can disaffirm the contract.
There are exceptions, such as contracts for necessities (food, clothing, shelter) or contracts ratified upon reaching the age of majority.
Mental Incapacity:
Mental incapacity can result from conditions such as mental illness, intellectual disability, or intoxication.
A person lacks capacity if they are unable to understand the nature and consequences of the contract.
Contracts entered into by individuals lacking mental capacity may be void or voidable, depending on the severity of the incapacity and the jurisdiction.
Legal Implications of Capacity
Void vs. Voidable Contracts:
A void contract is not valid from the beginning and cannot be enforced by either party.
A voidable contract is valid unless and until it is disaffirmed by one of the parties (e.g., a minor).
Ratification:
Ratification occurs when a person who lacked capacity at the time of contract formation later affirms the contract after gaining capacity (e.g., a minor reaching the age of majority).
Ratification makes the contract fully enforceable.
Mistake
Mistake: Questions about how it works? (None)
Unilateral vs. mutual mistake.
Types of Mistakes
Mutual Mistake:
Occurs when both parties to a contract share a mistaken belief about a fundamental aspect of the agreement.
The mistake must relate to a basic assumption on which the contract was made.
Example: Both parties believe a rare painting is authentic when it is a forgery.
Unilateral Mistake:
Occurs when only one party is mistaken about a fundamental aspect of the agreement.
Generally, a unilateral mistake does not make a contract voidable unless the other party knew or had reason to know of the mistake, or the mistake was so serious that enforcing the contract would be unconscionable.
Example: One party believes they are selling 100 units of a product when the actual agreement states 1,000 units.
Legal Implications of Mistake
Voidability:
A contract based on a mutual mistake may be voidable by the adversely affected party if the mistake is material and relates to a basic assumption of the contract.
A unilateral mistake typically does not make a contract voidable unless specific conditions are met (knowledge by the other party, unconscionability).
Misrepresentation and Nondisclosure
Misrepresentation and Nondisclosure: Questions?
Cases mentioned:
Late lobby Oregon case
Folks v Murray (dance school case)
Hill v Jones (housing case)
Question: Can mistake and misrepresentation be connected to frustration or impracticability?
Misrepresentation: Someone says something untrue.
Mistake: Both parties assume something to be true, but it's wrong.
Frustration and impracticability usually involve unexpected new events after contract formation.
Misrepresentation and mistake are about what happens before the contract.
Types of Misrepresentation
Fraudulent Misrepresentation:
A false statement made with the intent to deceive.
The party making the statement knows it is false or has reckless disregard for its truth.
The injured party must justifiably rely on the misrepresentation.
Negligent Misrepresentation:
A false statement made carelessly or without reasonable grounds for believing it to be true.
The party making the statement owes a duty of care to the other party.
The injured party must justifiably rely on the misrepresentation.
Innocent Misrepresentation:
A false statement made without knowledge of its falsity and without negligence.
The party making the statement believes it to be true.
The injured party must justifiably rely on the misrepresentation.
Nondisclosure
Nondisclosure occurs when a party fails to disclose a material fact that they have a duty to disclose.
A duty to disclose may arise where there is a fiduciary relationship, where disclosure is necessary to correct a prior misrepresentation, or where the undisclosed fact is a basic assumption of the contract.
Legal Implications of Misrepresentation and Nondisclosure
Rescission:
The injured party may be able to rescind the contract, meaning they can cancel the contract and return to their pre-contractual position.
Damages:
The injured party may be able to recover damages, depending on the type of misrepresentation.
For fraudulent misrepresentation, the injured party may recover compensatory and punitive damages.
For negligent misrepresentation, the injured party may recover compensatory damages.
Duress and Undue Influence
Duress and Undue Influence: Any questions?
Duress
Duress involves coercion or threats that overcome a party's free will and induce them to enter into a contract.
Duress can take various forms, including physical duress (threat of physical harm) and economic duress (threat to financial interests).
Undue Influence
Undue influence involves unfair persuasion by a party who dominates another party due to a relationship of trust or confidence.
Examples of relationships where undue influence may arise include attorney-client, doctor-patient, and caregiver-dependent.
Legal Implications of Duress and Undue Influence
Voidability:
A contract entered into under duress or undue influence is voidable by the injured party.
Rescission:
The injured party may be able to rescind the contract and recover restitution.
Unconscionability
Unconscionability: Any questions?
Elements of Unconscionability
Procedural Unconscionability:
Focuses on the circumstances surrounding the contract negotiation and formation.
May involve factors such as unequal bargaining power, lack of opportunity to review the contract, or use of fine print or complex language.
Substantive Unconscionability:
Focuses on the terms of the contract itself.
May involve terms that are overly harsh, one-sided, or unfair.
Legal Implications of Unconscionability
Refusal to Enforce:
A court may refuse to enforce an unconscionable contract or clause.
Modification:
A court may modify the contract to remove the unconscionable terms.
Illegality and Public Policy
Illegality and Public Policy: Any questions?
Illegality
Illegality involves contracts that violate statutes or common law principles.
Examples include contracts for illegal activities (e.g., drug trafficking) or contracts that violate licensing requirements.
Public Policy
Public policy involves contracts that are contrary to the interests of society.
Examples include contracts that restrain trade, contracts that promote discrimination, or contracts that violate fiduciary duties.
Legal Implications of Illegality and Public Policy
Voidness:
An illegal contract is generally void and unenforceable.
Unenforceability:
A contract that violates public policy may be unenforceable.
Parole Evidence Rule
Parole Evidence Rule: Questions?
Question about the connection between letters of intent and the parole evidence rule.
If a letter of intent is a negotiating document, is it integrated? Is it a complete and final definitive statement of the contract terms?
Letters of intent usually contain a nonbinding term sheet as a negotiating document.
If an LOI is well-drafted, it should make clear that parties can walk away and don't have to negotiate. It remains preliminary and not definitive.
Explanation of the bootstrap rule:
A party alleges an oral side deal in court, despite a written agreement.
The judge believes the party and uses the allegation of an oral agreement to prove the written agreement was incomplete.
This allows the oral agreement to modify the contract. It's a circular, catch-22 situation.
Supplements vs. Contradicts:
If the writing says x, y, and the oral thing says z, unless z is basically not x or not y, the court will treat it as a supplement.
However if the oral addition effectively reduces x, this would be a contradiction.
Purpose of the Parole Evidence Rule
The parol evidence rule is designed to prevent parties from introducing extrinsic evidence (oral or written) to contradict or vary the terms of a fully integrated written contract.
The rule promotes certainty and stability in contractual agreements by giving weight to the written terms chosen by the parties.
Exceptions to the Parole Evidence Rule
Ambiguity:
Extrinsic evidence is admissible to explain or clarify ambiguous terms in the written contract.
The ambiguity must exist in the written contract itself; extrinsic evidence cannot create ambiguity.
Fraud, Duress, or Mistake:
Extrinsic evidence is admissible to show that the contract was induced by fraud, duress, or mistake.
This exception allows parties to challenge the validity of the contract based on these grounds.
Collateral Agreements:
Extrinsic evidence is admissible to prove the existence of a separate, collateral agreement that is not inconsistent with the written contract.
The collateral agreement must be supported by separate consideration.
Subsequent Modifications:
Extrinsic evidence is admissible to show that the written contract was subsequently modified by a later agreement.
The modification must be supported by consideration.
Integration Clauses
Integration clauses are provisions in a written contract stating that the contract is the complete and final agreement between the parties.
The presence of an integration clause strengthens the application of the parol evidence rule, making it more difficult to introduce extrinsic evidence.
Norton Armco & Indefiniteness
Question: if a contract has indefiniteness, like the Norton Armco, and we said, like, if you put a variable in there, is it considered a completely integrated agreement, or is it just partially since you didn't actually like, you don't have that material price?
A variable term that is linked to an external index (e.g., CPI) is not indefinite because it's objectively identifiable.
An agreement to agree on a price in the future is indefinite and unenforceable unless some external criteria feeds the answer.
Negotiating in good faith towards a price means making reasonable commercial arguments.
Indefiniteness
Indefiniteness arises when the terms of a contract are so uncertain or incomplete that the parties' intentions cannot be ascertained with reasonable certainty.
A contract may be deemed indefinite if it lacks essential terms such as price, quantity, or subject matter.
Open Terms
Open terms are provisions in a contract that leave certain terms to be determined at a later time.
The Uniform Commercial Code (UCC) provides gap-filler provisions that may supply missing terms if the parties intended to enter into a binding agreement.
Variable Terms
Variable terms are terms in a contract that are subject to change based on external factors or indices.
Examples include price escalation clauses linked to inflation or cost-of-living adjustments.
Agreements to Negotiate in Good Faith
Agreements to negotiate in good faith are agreements in which parties commit to negotiating the terms of a contract in a fair and reasonable manner.
While such agreements are generally enforceable, courts may be reluctant to award damages for breach unless the terms of the ultimate agreement can be determined with reasonable certainty.
External Sources: Course of Performance & Course of Dealings
Course of dealings: Multiple deals over time between the same parties.
Course of performance: What parties have done so far within one particular deal.
Course of Dealing
Course of dealing refers to a sequence of previous conduct between the parties that establishes a common basis for interpreting their agreement.
It involves the parties' past interactions and how they have interpreted similar contract terms in the past.
Course of Performance
Course of performance refers to the parties' conduct under the specific agreement in question.
It involves how the parties have interpreted and performed the contract up to a certain point in time.
Importance of Course of Dealing and Course of Performance
Course of dealing and course of performance are relevant in interpreting ambiguous contract terms.
They provide evidence of the parties' intentions and how they have interpreted the contract in practice.
Courts may consider course of dealing and course of performance in determining the meaning of contract terms.
Duty of Good Faith
Connect the duty of good faith to a specific obligation, effort, or action.
Question: Do you have a duty to negotiate in good faith?
The baseline is that there is no duty to negotiate in good faith unless the parties agree to it.
Letters of intent raise the question of whether parties entered into an agreement to negotiate in good faith.
Cases mentioned:
Channel Homes (yes)
TIAA/Chicago Tribune (yes)
Schwanbeck (no)
Enpro (no)
If there's an obligation to negotiate in good faith, it's not an agreement to contract but an obligation to negotiate toward such an agreement.
If parties agree to negotiate in good faith, they must make fair, reasonable arguments and cannot use pretextual arguments.
Unless a clear statement or intention to negotiate in good faith, there is no duty to negotiate in good faith.
Courts are aware of the danger to start finding agreements to negotiate in good faith. They are aware of the dangers, because there's this general rule that says you do not have an you do not have a duty to negotiate in good faith. You you don't have a duty to negotiate. As American law, you don't have that.
No-shop clause: Suggests an intention to negotiate in good faith.
The key thing about the mutual agreement to negotiate in good faith is that it limits the grounds on which you can walk away.
Does the breakdown of the negotiations have to be over a material term?
Probably, yes.
Definition of Good Faith
Good faith is generally defined as honesty in fact and the observance of reasonable commercial standards of fair dealing.
It requires parties to act honestly and not to take unfair advantage of each other.
Application of the Duty of Good Faith
The duty of good faith applies to the performance and enforcement of contracts.
It prohibits a party from acting in bad faith to undermine the other party's rights under the contract.
Examples of Bad Faith Conduct
Evasion of the spirit of the bargain
Willful rendering of imperfect performance
Abuse of a power to specify terms
Interference with or failure to cooperate in the other party's performance
Warranties
Express or implied?
Express Warranties
Express warranties are explicit promises or representations made by the seller regarding the quality, condition, or performance of the goods.
They can be created through statements of fact, descriptions of the goods, or the use of samples or models.
Implied Warranties
Implied warranties are warranties imposed by law unless disclaimed by the seller.
The two primary implied warranties are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.
Disclaimer of Warranties
Sellers can disclaim or exclude warranties, but the disclaimer must be clear and conspicuous.
Disclaimers of implied warranties are generally required to mention the word \"merchantability\" and must be conspicuous.
Conditions
Express conditions, implied conditions.
Species of implied conditions: sequence of performance (constructive conditions of exchange).
Substantial performance, material vs. immaterial breach.
Express Conditions
Express conditions are conditions explicitly stated in the contract that must occur before a party's performance is due.
Failure of an express condition excuses the non-occurrence of the party's performance.
Implied Conditions
Implied conditions are conditions not explicitly stated in the contract but implied by law or the nature of the agreement.
Examples include the implied condition of cooperation and the implied condition of good faith.
Conditions Precedent, Concurrent, and Subsequent
Condition Precedent: A condition that must occur before a party's performance is due.
Condition Concurrent: Conditions that must occur simultaneously.
Condition Subsequent: A condition that terminates a party's obligation to perform.
Defensive Remedies for Breach
If the other party commits material breach (fails to perform or renders defective performance), you can suspend your own performance.
Anticipatory Repudiation:
Before performance is due, one party clearly states they won't perform (Hoxtary de la Tour).
If it's waffly, it may be reasonable insecurity, allowing the other party to demand reasonable assurance.
Restatement 235(2): When performance is due, any nonperformance is a breach.
Anticipatory repudiation is when you say you won't perform before it's due or take actions that make performance impossible.
Correct terminology is needed to describe whether someone has repudiated (clear, unambiguous statement) or merely given grounds for insecurity.
You will want to learn the back and forth in the correct terminology to be used. Does somebody actually repudiate. That has to be a clear, unambiguous statement, the anticipatory repudiation. Or have they merely waffled in a way that constitutes giving grounds, you know, reasonable grounds for insecurity? Then the other side doesn't have to, but has the right to demand reasonable assurances.
Material Breach
A material breach is a substantial failure to perform a contractual obligation that justifies the other party in suspending their own performance or terminating the contract.
Factors considered in determining whether a breach is material include the extent to which the injured party is deprived of the benefit they reasonably expected and the extent to which the breaching party can cure the breach.
Anticipatory Repudiation
Anticipatory repudiation occurs when one party clearly and unequivocally indicates that they will not perform their contractual obligations before the time for performance is due.
The non-breaching party may treat the repudiation as a breach and pursue remedies such as damages or specific performance.
Demand for Adequate Assurance
If reasonable grounds for insecurity arise regarding a party's ability or willingness to perform, the other party may demand adequate assurance of performance.
The demand must be made in writing and must be reasonable under the circumstances.
Failure to provide adequate assurance within a reasonable time may be treated as a repudiation.
Frustration and Impracticability
Impracticability and frustration.
No questions. Move on.
Impracticability
Impracticability occurs when an unforeseen event makes performance of a contractual duty objectively impossible or commercially senseless.
The event must be one that the parties did not contemplate at the time of contracting and must not be the fault of the party seeking to be excused.
Frustration of Purpose
Frustration of purpose occurs when an unforeseen event undermines the fundamental purpose of the contract, even if performance is still possible.
The event must be one that the parties did not contemplate at the time of contracting and must substantially frustrate the party's purpose in entering into the contract.
Examples of Events Giving Rise to Impracticability or Frustration
Natural disasters (e.g., earthquakes, floods)
War or terrorism
Government regulations or orders
Labor strikes or shortages
Damages
Expectation, reliance, and restitution damages: Plaintiff will usually specify which they want. * Sort of, expectant expectancy damages, that's your biggest one. That's your normal. If some reason you didn't wanna go that route, you could request the other. In pretty much any case I can think of, you know, reliance damages is like a subset of expectation damages. Like, if you do expectation damages and you can't show some speculative profit in the future, you'll still get whatever your expenses and costs and and harm was just like under reliance. So, you know, it's like, why would you ever bother saying reliance rather than expectation? I don't know a lot, honestly.
Expectation Damages: Normal and Biggest
Restitution: ask for it when you want to get back what you put in
You get one or the other.
Difference Between Expectation, Reliance, and Restitution vs. Direct, Indirect, and Consequential:
Expectation is direct, indirect, and consequential, minus loss avoided.
Reliance: money spent or something given up, often will be the same expectation damages.
If you have a binding LOI without a breakup fee, can you collect reliance damages if the other party walks?
Yes, for expenses like lawyers and accountants.
Divisible and Indivisible Contracts:
Divisible Contract Question: If it's a divisible contract, are all the promises considered dependent covenants?
The first is supposed to go first before the other happens.
Their performance with constructively implicitly condition upon their not having been a first material breach by the other party. That is by the other party having substantially performed when due. Only the other party, substantially performing when you said is the implied, the constructive condition, lighting up duty of the second party to perform if the sequential rather than concurrent.
Concurrent: Both parties tender. (Showing up, ready, willing, able, here I am)
Sequential: Johnny has to perform first, then I pay, and only once he has substantially performed when due, that's what lights up my duty to pay.
Restatement section two thirty five, two 30 five sub two Failure to perform when due.
Expectation Damages
Expectation damages are intended to put the injured party in the same position they would have been in if the contract had been fully performed.
They include lost profits, the cost of cover (purchasing substitute goods or services), and other consequential damages.
Reliance Damages
Reliance damages are intended to compensate the injured party for losses incurred in reliance on the contract.
They include expenses incurred in preparing for performance, such as purchasing materials or hiring employees.
Restitution Damages
Restitution damages are intended to restore to the injured party any benefit they conferred on the breaching party.
They are often awarded when the injured party has partially performed the contract but cannot recover expectation damages.
Duty to Mitigate Damages
The injured party has a duty to take reasonable steps to mitigate (reduce) their damages.
The breaching party is not liable for damages that the injured party could have avoided through reasonable efforts.
Mental Anguish & Punitive Damages
Mental anguish, pain and suffering, and punitive damages.
Mental Anguish Damages
Mental anguish damages are generally not recoverable in contract cases unless the breach is accompanied by physical injury or is particularly outrageous.
Some jurisdictions allow recovery for mental anguish damages in cases involving contracts of a personal or emotional nature.
Punitive Damages
Punitive damages are generally not recoverable in contract cases unless the breach involves tortious conduct, such as fraud or bad faith.
Punitive damages are intended to punish the breaching party and deter similar conduct in the future.
Third Party Interests
Assignment and Delegation:
For the right to assignment, do you always, unless you're you're assigning transferring that right to someone else that's gonna adversely affect the other party, do you always just inherently have, like, and assign the right to assign?
Generally, the presumption is you can assign your rights under a contract to receive payment, especially payment payment. But it's the delegation of your duty, somebody else is gonna do your part. That's the tricky one because that can really have an adverse effect on the other party.
The reason you have to put void in there is because you automatically came to had assignment, right.
Presumptively, rights to receive under a contract are assignable.
Presumptively, every presumptively rights to receive under a contract are assignable.
Anti-assignment clause.
Third Party Beneficiaries:
Creditor beneficiaries, donee beneficiaries.
Cases mentioned:
Virgin Islands case with the landlord and Kmart (Balfour Beatty case) - Creditor beneficiary case
Hale v Gross (lawyer setting up testamentary documents) - Donee beneficiary case
How do you, like, prove you're a beneficiary like, through the parole evidence rule?
Someone hires to do the benefit of which is gonna to pay in satisfaction with your pre-existing contractual duty to Pete. Pete is a contract creditor, not creditor in the sense, but you owe him money, but you owe him whatever it is, but you owe him something under an existing contract. He's a contract creditor.
The Pete and Wedding Hypothetical: Is the Bartender the Crdditor?
How does Pete show damages?
Assignment
Assignment involves the transfer of contractual rights from one party (the assignor) to another party (the assignee).
As a general rule, contractual rights are freely assignable unless the assignment is prohibited by contract or statute, or the assignment would materially alter the obligor's duty.
Delegation
Delegation involves the transfer of contractual duties from one party (the delegator) to another party (the delegatee).
Contractual duties are generally delegable unless the duty is personal in nature or the contract prohibits delegation.
Third-Party Beneficiaries
A third-party beneficiary is a person who is not a party to the contract but who benefits from the contract.
A third-party beneficiary may have the right to enforce the contract if the parties intended to benefit the third party.
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