Discharge of Contract and Remedies of Contract
Discharge of Contract and Remedies of Contract
BY
NISHANT
GUPTA
2004 West Legal Studies in Business
A Division of Thomson Learning
four ways:
By Performance.
By Agreement of the Parties.
By Operation of Law.
By Nonperformance.
DISCHARGE BY PERFORMANCE
Complete Performance.
Exact fulfillment of the terms of the contract.
Substantial Performance.
Minor deviations from contract specifications.
Two criteria must be met:
1) Breach must not have been material.
2) Breach must be non-willful and devoid of bad
faith conduct.
2004 West Legal Studies in Business
A Division of Thomson Learning
DISCHARGE BY AGREEMENT
OF THE PARTIES
Release.
Rescission.
Accord and Satisfaction.
Novation.
DISCHARGE BY AGREEMENT
OF THE PARTIES
Release.
Discharging the legal rights one party has against another.
To be valid, should be in writing, supported by
Rescission.
Voluntary, mutual surrender and discharge of contractual
DISCHARGE BY AGREEMENT
OF THE PARTIES
Accord and Satisfaction.
Agreement to accept performance different from that
DISCHARGE BY NONPERFORMANCE
Impossibility.
Commercial Frustration.
Actual Breach.
Anticipatory Breach.
Conditions.
DISCHARGE BY NONPERFORMANCE
Impossibility.
An unforeseen event or condition which
precludes performance.
Conduct by one party which makes
performance by the other party impossible is
objective impossibility.
Subjective impossibility consists of
nonperformance owing to personal
impossibility.
2004 West Legal Studies in Business
A Division of Thomson Learning
DISCHARGE BY NONPERFORMANCE
Commercial Frustration.
This doctrine excuses performance in cases
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DISCHARGE BY NONPERFORMANCE
Anticipatory Breach.
Involves giving advanced notice, through
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DISCHARGE BY NONPERFORMANCE
Conditions.
Conditions may result in nonperformance
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DISCHARGE BY NONPERFORMANCE
Courts classify conditions in two ways:
Timing.
Conditions Precedent.
Concurrent Conditions.
Conditions Subsequent.
arise.
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TYPES OF REMEDIES
Legal Remedies (money damages):
Compensatory Damages.
Consequential Damages.
Punitive Damages.
Nominal Damages.
Liquidated Damages.
Mitigation of Damages.
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TYPES OF REMEDIES
Equitable Remedies:
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DAMAGES
Most common legal remedy sought by
injured party.
Courts ask, when computing damages
whether breaching party, as a reasonable
person, should have foreseen the injuries
that would result from breach.
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DAMAGES
Compensatory Damages.
Sums of money which will place the injured
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DAMAGES
Duty to Mitigate.
To measure damages the courts place on the
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DAMAGES
Liquidated Damages.
When parties agree in advance to a certain sum
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EQUITABLE REMEDIES
Plaintiffs eligibility to receive fairness
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EQUITABLE REMEDIES
Rescission and Restitution.
Voluntary agreement to rescind, or set aside the
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EQUITABLE REMEDIES
Specific Performance.
When restitution is inadequate or unjust.
Court compels the breaching party to perform
Quasi Contract.
Creation of contract for the parties to prevent
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EQUITABLE REMEDIES
Reformation.
Rewriting a contract in order to remove a
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LIMITATIONS OF REMEDIES
Contract language may actually limit
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WAIVER OF BREACH
Contracting party may agree to accept less
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