Professional Documents
Culture Documents
Chapter 11
Chapter 11-1
Question
Whipple bought a high-powered sports coupe from
Oriental Motors for $32,000. After a down payment
of $2,000, the balance, plus a finance charge, was to
be paid by mail in installments over the following 48
months. Oriental Motors needed cash to restore its
inventory of new cars. It immediately sold Whipples
contract to a finance company, Palmout Inc., and told
Whipple to mail all installment payments to Palmout.
Is such a transfer of contract rights legal?
Yes, the can. The parties involved are:
Assignor: Oriental Motors
Assignee: Palmout
Obligor: Whipple
Assignable Rights
A party may assign contractual rights to
Non-Assignable Rights
These contract situations cannot be transferred:
Assignments
Assignments can be written or oral but
written is preferred.
Not until the obligor has been notified
CHECKPOINT
Under what conditions may you assign contractual
rights to another person?
Question
When Sheila told him that she could no pay the full
$1,000 she owed him by August 1 as required by
their contract, Bob suggested a new agreement.
After some negotiations, he agreed to take $500 as
payment in full if Sheila could provide it by July 15.
When Sheila failed to make the payment by July 15,
Bob demanded the $1,000 be paid according to the
terms of the original contract. Dows Sheila owe $500
or $1,000
Because she failed to pay under the accord the $500
by July 15 she still owes the $1,000. The old
contract was still in effect.
Go To
Go To
By Subsequent Agreement
Go To
By Impossibility of Performance
By Operation of Law Go To
By Tender of Performance
Go To
Go To
By Performance
Discharge termination of duties that
By Performance
Breach of Contract failure to provide
complete performance.
By Performance
Substantial Performance when just about all the
A minor breach does not discharge the duties of the nonbreaching party.
Timing of Performance
If contract doesnt identify time then
By Subsequent Agreement
When parties mutually agree to change either the terms or the nature of
their relationship. They can do without liability for breach in any of the
following ways:
Back
By Impossibility of Performance
Extreme external conditions rather than an obligors
or even termination.
Back
By Operation of Law
Contract may be discharged if it is barred by law.
material
made intentionally
made by a party or authorized agent
made without consent of the other party
Back
By Tender of Performance
Tender a ready, willing and able offer too perform an
obligation.
If the duty requires the doing of an act, the tender that is
made in good faith but is rejected will discharge the
obligation of the one to perform.
If the obligation requires the payment of money, rejection
of an offer to pay the money does not discharge the debt
nor does it prevent the creditor from collecting later. It
does however, relieves the debtor of court costs or future
interest charges.
A tender of only part of the debt is not a valid tender.
CHECKPOINT
Identify the six ways in which contractual obligations
can be discharged?
By Performance
By the initial terms
By Subsequent Agreement
By Impossibility of Performance
By Operation of Law
By Tender of Performance
Question
Tori operated a business that provided graphic design
and printing services. Gerov contracted to have Tori
design and print 25,000 brochures in full color
promoting a variety of international tours. Under their
contract, Tori also agreed to address and mail
envelopes containing the brochures to a select list of
prospects. Tori delegated the addressing, stuffing,
and mailing of the envelopes. Is this a valid
delegation? Does Tori remain liable to Gerov for
proper completion of the entire job?
Yes, the performance can be delegated as it does not
require special skills. Yes, any delegation of duties leaves
the delegator still liable to the other contracting party.
Question
Your school orders 50 new uniforms for its marching
band. The contract is with Quality Uniforms Inc., a
firm with whom the school has done business for 12
years. A week before the first public performance by
the band, Quality states that it has overbooked its
business and has delegated the sewing to New Era
Uniforms. Is the delegation legally proper?
No, the contract is based on trust from 12 years of
experience and the qualifications of skill and quality.
Question
Your school orders 50 new uniforms for its marching
band. The contract states that time is of the
essence, and if the goods are not received in time
for the first performance by the band of September 1,
the old uniforms will be used for another year. The
performance is the major part a contest to see which
area band will go to New York City to take part in its
Thanksgiving Parade. The manufacturer does not
deliver the uniforms until September 3. Can the
school cancel the contract.
Yes, Time truly is of the essence in this situation. Just
putting the statement in the contract, however, would
not make it so.
Chapter 11-2
Question
Liz contracted to buy 160 acres of land from McCall.
She planned to build an amusement park on the land
that was near the junction of two interstates and had
adequate utilities and population density. When
McCall learned of her plan, he refused to transfer the
title. What is the optimal remedy for Liz?
Liz could likely win a suit for specific performance. The
court would order McCall to transfer title to the property
with a properly signed deed delivered to Liz.
Money Damages
Payment of money to compensate for injury. May be:
Compensatory
Consequential
Liquidated
Punitive
Nominal
Compensatory
Consequential
Liquidated
Punitive
Nominal
Next
Compensatory
Seeks to place the injured party in the same financial
Money Damages
Consequential
The court tries to place inured parties in the same financial
Money Damages
Punitive
The purpose is to punish and to make an example of the
defendant.
When fraud or an intentional tort is involved in breach of
contract.
Added to other money damages.
Money Damages
Liquidated
Parties sometimes agree that certain amount of money will
Nominal
Nominal failure to perform the contract is a legal wrong.
Therefore, courts even when no harm has been done will
award a taken amount called nominal damages.
Money Damages
Specific Performance
Making the party in breach of contract to order that the
CHECKPOINT
Explain the remedies available for a major breach of
contract.
Rescission/Restitution
Damages
Specific Performance
Question
Jim high and tight Brushback, an unknown baseball
pitcher, signed a two-year contract to play for a major
league team for $120,000 a year. After two months,
Brushback had won all four games hed started with
37 strikeouts and an earned-run average (ERA) of
1.75. He then contracted with a competing team for
$12 million a year, thereby breaching his contract.
What remedies are available to the original team?
Brushbacks original team could recover the two months
wages ($20,000) restitution. However, if the team
elects this remedy, they would lose the ability to sue for
damages and the ability to obtain and injunction to stop
Brushback from playing for the competition.
Duty to Mitigate
Mitigate the damages minimize the harm done
Injured party is required by law to take reasonable steps to
Waivers
Wavier when the party intentionally and explicitly gives
up a contractual right.
Statute of Limitations
Statues in all states deny any remedy if suit is not brought
a breach or default.
Bankruptcy
a legal proceeding whereby a debtors assets are
CHECKPOINT
What does it mean to mitigate the damages?
Question
A college football coach has directed his team to division
championships five times. With two years remaining in his
current three-year employment contract, he notifies the college
president that he is resigning in order to coach a professional
team at a higher salary. Is the coach legally free to change
employers? Is the professional team legally free to hire him?
What can the college legally do?
No, the coach is not legally free to change employers. This would
be a breach of contract.
The professional team is legally free to hire him unless an
injunction is issued that prevent the coach from working for
someone else during the remainder of his contract.
The college can sue for restitution or for specific performance.
Question
The Bethlehem Steel Company contracted with the city
of Chicago to supply and erect the steelwork for a
certain section of an interstate highway. The price
agreed upon was $1,734,200. The contract also
provided that the steel company would pay as
liquidated damages $1,000 for each day the work
was extended and uncompleted beyond a specified
date. The work was completed 52 days after the
date agreed upon. Is the company liable for
$52,000?
Yes, they are liable for the $52,000
Question
Rivera had the concession rights to sell food, drinks and souvenirs
at a post-season football bowl game. Some 60,000 reserved
seat tickets had been sold for the event. As part of her
preparations, Rivera contracted with the High Novelty Company
for 10,000 pennants, noisemakers, and other items imprinted
with the emblems and in the colors of the two competing teams.
Although Rivera had emphasized the absolute necessity of
delivery at least eight hours before game time, the goods
arrived tow days after the game had been played. Can Rivera
recover lost profits from Ace? Why?
Question
Taipei Yang ordered 900 solid brass bowls for indoor plants from
the East-Meets-West Company, which imports such goods from
Singapore. Yang had included the bowls as a special in his
holiday gift catalog and expected to generate a net profit of a
least $9000 from their sale. When the shipment arrived and
was opened, Yang scratched the bottom of one bowl and
determined that it was steel with a surface plating of brass.
Yang complained to the supplier, who pleaded ignorance and
apologized. Nothing further was said and Yang paid the full
price. Three months later he thought he should get a reduction
in price because of the defect. Will he succeed?
Question
While under contract with the county, Pyramid Paving
improperly applied asphalt to the public gravel road in
front of your familys home. Soon after application,
large cracks appeared and your family complained. It
took the city six years to file suit. What defense can
Pyramid assert?
Pyramid can assert that the statue of limitations for
breach of contract has passed. Most states allow four
years after the contract ahs been breached for the
victim to sue. In taking six years, the city waited too
long.
Chapter 11-3
and wife.
Typical minimum age (varies by state) to marry 18 years.
Close relatives may not marry.
If child results prior to marriage identified male is
could be brought.
If ring given by other in expectation or marriage the courts
Common-Law Marriage
Man/Woman living together (usually 10 years) sharing
Divorce
Variety of illegalities
Annulment
Annulment a court order that cancels a marriage
Back
Divorce
Divorce court dissolution of marriage. Court divides property
Alimony
Division of Property
Most states based on English common law
Property brought into a marriage remains that spouses property
should marriage end.
During marriage whatever earned, inherited, received as gift also
remains the property of spouse who earned or received it
Community Property states
Parents wishes
Childs wishes
Childs relationship with parents, siblings and others that affect the child
childs adjustment to home, school and community
physical and mental health of all person concerned.
Back
Alimony
support paid by the wage earned of the family
CHECKPOINT
Name three ways in which a marriage contact is ended.
Question
Maria is an only child. Her mother died when she was eight years
old. Now, seven years later, her father is engaged to remarry,
and Maria objects. She is afraid that her fathers new wife will
come between her and her father and that the new wife will end
up with the family home after her father dies. Ethically, should
Maria try to persuade her father not to marry? What legal
device would help resolve part of her worries if she could get
both her father and his intended to enter into it?
Question
Marcel is 22 years old and Heather is 16. They are very
much in love and planned to get married right away.
After Heathers parents refused to consent to her
marriage, Heather and Marcel eloped. Can
Heathers parents have the marriage annulled even
though Marcel is an adult?
Yes, Ether of their parents could bring suit to annul the
marriage.
Question
Michael was driving home late one night when a tractor trailer truck
ran a red light and struck his vehicle. Even thought Michael was
wearing a seat belt and his air bag properly deployed, he was
critically injured. Several months later it become obvious that
he was permanently paralyzed from the waist down. Michael
has grounds for a lawsuit against the trucking company and the
driver of the tractor semi-trailer. What cause of action does his
wife have? How do you think a judge will decide?
Question
Orlando and Mary lived together for 14 years in Oklahoma City.
During the latter part of their cohabitation, they both claimed to
be married to one another . In addition, they added Mr. and
Mrs. to their address and held a joint band account in those
names. Now they are living apart from one another. Orlando
currently lives in California. He has fallen in love with another
woman and plans to marry her. As a consequence, he hires an
attorney to determine whether he and Mary were legally
married. What will the attorney check first? What other
elements of common-law marriage might be significant in the
determination? Is Orlando free to marry another?
The attorney will first check to see if Oklahoma has common-law
marriage and if it does how long the period for it is. Other
significant factual points will be the time of cohabitation and how
long they held themselves out as married.
Question
The night after Zeke and Shanda were married, Shanda admitted
that she was pregnant by another man. Can Zeke end their
marriage? How?
Question
Bernice and Bernie are married. he is a Certified Public
Accountant making $75,000 per year. She is an architect
making almost exactly the same amount. In the event of
divorce, who will pay whom alimony?