Name: Bryon D Gaskin

Course: BUS 102 –Business Law

Term: Fall 2002

Instructor: Mr. Tim Bianco Esq.
DUE 10-13-02

Assignment 6

Chapters 12 and 14

Week six
Exercise six

  1. Read Chapter twelve: "Form of the Agreement questions:
  2. Know Key Terms
  3. Answer Review and Discussion questions two, six, five
  4. Cases for Analysis number 3 pg 197 and answer the questions contained in the case study
  5. Read Chapter Fourteen: A Discharge and Remedies@
  6. Know Key Terms
  7. Answer Review and Discussion questions three, nine
  8. Cases for Analysis number 7 pg 229 and answer the questions contained in the case study

Case Study Two, Page 230 Wilcox v. Trautz
Answer All Questions for Analysis contained in the case study

CHAPTER 12 Form of the Agreement Questions;

Key Terms:

  • Acknowledgment: The official recognition by a notary public that another’s signature was made by that party’s free will. The acknowledgement is accomplished when the notary has signed the document and added the official seal to it.
  • Administrator: Administrator or administratix is a person appointed by the court to do the work of an executor if none is named in a will or if the executor either refuses to perform or is incapable of performing the duties.
  • Authenticate: to sign or with the intent to sign a record, otherwise to execute or adopt an electronic symbol, sound message, or process referring to, attached to, included in, or logically associated or linked with, that record.
  • Best evidence rule: The legal rule that holds that the courts generally accept into evidence only the original of a writing, not a copy.
  • Condition precedent: In contract law, an act or a promise that must take place or be fulfilled before the other party is obligated to perform his or her part of the agreement.
  • Equal dignities rule: The legal rule that provides that when a party appoints an agent to negotiate an agreement that must be in writing, the appointment of the agent must also be in writing.
  • Equitable estoppel: An exception to the rule that contracts for sale of land must be in writing. It applies when a person relies on an owner’s oral promise to sell real estate and then makes improvements on the property or changes his or her position in an important way.
  • Executor: The party named in a will to carry out the terms of the will.
  • Guaranty of payment: A promise to pay another’s bill or to settle wrongful acts if that party does not settle them personally.
  • Memorandum: A written agreement containing the terms of an agreement, an identification of the subject matter of the agreement, the consideration promised, the names and identities of the parties to the agreement, and the signature of the party charged to the agreement.
  • Parol evidence: The rule that states that evidence of oral statements made before signing a written agreement is usually not admissible in a court to change or to contradict the terms of a written agreement.
  • Part performance: An exception to the rule that contracts for sale of land must be in writing. It applies when a person relies on an owner’s oral promise to sell real estate and then makes improvements on the property or changes his or her position in an important way. Also called equitable estoppel.
  • Statute of fraud: A law requiring certain contracts to be in writing to be enforceable.
  • Uniform Facsimile Signatures of Public Officials Act: A law that allows the use of facsimile signatures of public officials when certain requirements are followed.
Questions for Review and Discussion

Answer Review and Discussion questions two, six, five

No 2. What are the six types of contracts that must be in writing to be enforceable under the statute of frauds?

  1. Contracts that must be completed within one year must be in writing to be enforceable.
  2. Contracts for the sale of land must be in writing to be enforceable.
  3. Contracts for the sales of goods of $500.00 or more must be in writing to be enforceable.
  4. Certain contracts of executors and administrators must be in must be in writing to be enforceable.
  5. Guaranty of debts of third parties must be in writing to be enforceable.
  6. Contracts in consideration of marriage must be in writing to be enforceable.

No 5 What are the essential elements that must be contained in a written memorandum?

The essential elements that must be contained in a written memorandum include, 1 the terms of the agreement, 2 the identification of the subject matter, 3 statement of the consideration promised, 4 names and identities of the persons to be obligated, and 5 the signature of the party sought to be bound to the agreement. It is necessary that a written agreement or memorandum has to contain the above 5 elements to be absolutely complete.

No 6. What is the parol evidence rule?

The parol evidence rule states that oral statements made before the actual singing of the written agreement or memorandum are usually not admissible in court as evidence. For instance a sales person stating that if you have any problems with this car, just bring it back and we will take care of it, if not a part of the written agreement, then the oral statements of the salesperson would more than likely not be admissible in court. There are exceptions to the parol evidence rule, including, when unfair and unjust decisions could possibly happen from it being invoked; or if a written contract is obscure and vague.

CASES for ANALYSIS

Cases for Analysis number 3 pg 197 and answer the questions contained in the case study.

No. 3 Was the store correct?

No the store was not correct.

Why or why not?

The store was not correct because the duties of the oral offer were completed within one year. The oral agreement would be enforceable in this instance, and Wilson would have a good case against Montgomery Ward. If the length of time to complete the duties of the contract extended past one year, then the contract would have to be in writing in order for the contract to be enforceable.

Wilson v Montgomery Ward

CHAPTER 14 Discharge and Remedies

KEY TERMS:

  • Abandonment of contractual obligations: The situation that exists when a party to a contract stops performance once it begun.
  • Actual damages: A sum of money equal to the real financial loss suffered by an injured party. Also called compensatory damages.
  • Anticipator breach: An anticipator breach occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract even before the being required to act.
  • Compensatory damages: A sum of money equal to the real financial loss suffered by an injured party.
  • Complete performance: This happens when both parities fully accept every term, condition, and promise to which they agreed.
  • Condition concurrent: It is a condition that requires both parties to perform at the same time.
  • Condition precedent: It is a condition that requires performance of certain acts or promises before the other party is obligated to pay money or to give the consideration agreed to.
  • Condition subsequent: It is a condition in which the parties agree that the contract will be terminated on a prescribed event occurring or not occurring.
  • Consequential damages: Losses that do not flow directly and immediately from an act but only from some of the consequences or results of the act.
  • Frustration of purpose doctrine: It releases a party from a contractual obligation when performing the obligations would be thoroughly impractical and senseless.
  • General release: A document expressing the intent of a creditor to release a debtor from obligations to an existing and valid debit.
  • Incidental damages: Damages awarded for losses indirectly, but closely, attributed to a breach to cover any expenses paid out by an innocent party to prevent further loss.
  • Injunction: A court order preventing someone from performing a particular act or commanding a defendant to do some positive act to alleviate a problem.
  • Liquidated damages: Damages agreed to by the parties to a contract in the event of a breach.
  • Mutual rescission: A condition in which both parties to a contract agree to rescind the contract and return to other any consideration already received or pay for any services or materials already rendered.
  • Nominal damages: Token damages awarded to parties who have experienced an injury to their legal rights but no actual loss.
  • Performance: In contract law, the situation that exists when the parties to a contract have done what they had agreed to do.
  • Punitive damages: Damages in excess of actual losses suffered by the plaintiff awarded as a measure of punishment for the defendant’s wrongful acts. Also called exemplary damages.
  • Reasonable time: In contract law, the time that may fairly, properly, and conveniently be required to do the task that is to be done, with regard to attending circumstances.
  • Satisfactory performance: In contract law, the situation that exists when either personal taste or objective standards determine the contracting parties has performed their contractual duties according to the agreement.
  • Specific performance: A decree from a court ordering a contracting party to carry out the promises made in a contract.
  • Speculative damages: damage computed on losses that have not actually been suffered and that cannot be proved; they are based entirely on an expectation of losses that might be suffered from a breach; the courts do not allow speculative damages.
  • Substantial performance: in contract law, the situation that results when a party to a contract, in good faith, executes all the promised terms and conditions of the contract with the exception of minor details that do not affect the real intent of their agreement.
  • Tender of payment: An offer by the buyer of gods to turn the money over to the seller.
  • Tender of performance: An offer to do what one has agreed to under the terms of a contract.
  • Termination by wavier: The situation that exists when a party to a contract with the right to complain of the other part’s unsatisfactory performance or nonperformance fails to complain.

Questions for Review and Discussion:

  1. Answer Review and Discussion questions three, nine

No. 3 What are the conditions precedent, condition concurrent, and condition subsequent in the performance of a contract?

Give and example of each.

  1. A condition precedent it is a condition in which one part is required to perform certain acts or promises before the other party is required pay money or render the consideration of the agreement. For example, a professional race car driver is told by his sponsor that if he wins the Indy 500 this year, we will receive a $1,000,000 bonus in addition to the actual winnings award by the Indianapolis Motor Speedway.
  2. A condition concurrent requires that both parties exchange consideration simultaneously. The exchange of money from a buyer for a new car from a seller is an example of a condition concurrent.
  3. A condition subsequent requires that all of the parties involved in the contract agree that the contract will be terminated on a predetermined event happening or not happening. In any contract, when the contract states that certain performance or act needs to be invoked by a certain date or the contract is void, this is an example of a condition subsequent. Warranties and fire insurance policies are often carried out in this manner.

No. 9 What types of damages are available to an injured party in a breach of contract suit?

The following types of damages are available in a breach of contract:

  1. Actual or compensatory damages;
  2. Incidental and consequential damages.
  3. Punitive or Exemplary damages
  4. Nominal damages
  5. Present and future damages
  6. Damages under Quantum Meruit
  7. Liquated damages:

********Speculative damages are damages that are computed on losses that have not actually been suffered and that cannot be proved, speculative damages are not allowed in court.

Explain mitigation of damages?

Mitigation of damages signifies that the party that has been injured has a responsibility to do what it can to minimize the damages it incurs. That is if there is a breach of contract by the other party, the injured party cannot not just set back and allow the breach to continue cause an accumulation of damages.

CASES for ANALYSIS

Cases for Analysis number 7 pg 229 and answer the questions contained in the case study

No 7. Was Erickson correct? In this instance Erickson is correct. If Erickson substantially performed the duties of the contract, and it in this instance it appears that it did, then they are entitled to consideration minus the cost to make reparations to the slide. Because the slide is useable, and there is not information indicating that to the contrary that Erickson performed its services in good faith, the contract has been completed; Erickson performed substantially; then the court should rule in favor of Erickson.

W. E. Erickson Construction, Inc v Congress-Kenilworth Corp. 477 N.E.2d 513

CASE STUDY II

Wilcox v. Trautz
Answer All Questions for Analysis contained in the case study

Questions for Analysis

  1. On what occasion would the court’s early decision preclude the enforcement of any agreement between unmarried parties? The court would not enforce the agreement between the two no married parties if the agreement was based on sexual fidelity.
  2. What was required in more recent decisions for oral promises between unmarried cohabitants to be valid? In oral agreements for the contract to be valid, the agreement could not be based on sexual relations being the inherent or major consideration for the agreement.
  3. Why does the court believe it should recognize the benefits to be gained by encouraging adult unmarried cohabitants to enter into written agreements? The court feels that although it is in the best interest for the public good that couples marry as opposed to living together, the mere fact that two people who are of adult age and clear mind living together should not be excluded from entering into a contract with one another; based only on the fact that they are living together. Although court seeks marriage over cohabilitation, he does seek to encourage couples living together to enter into written agreements. The reason for this is if the parities involved are adult, have the capacity to understand the agreement, and neither are unfairly disadvantaged to one another, then they parties should not be punished by not rewarding their efforts to mitigate litigation by entering into a contract.
  4. What is the theory of the cases holding that express agreements between adult unmarried persons living together are enforceable? The theory is that two unmarried people living together does not give rights to property and financial assets that would normally occur in the institution of marriage. More importantly, it does not preclude or prevent the parties from entering into an agreement with the normal rules of contract law.
  5. What view does the court adopt regarding contracts of unmarried cohabitants? The court’s view on contracts between unmarried cohabitants is that as long as the parties enter into the contract of free will, and that the consideration of the contract is not based on sexual fidelity, then the agreement should be subject to the rules and regulations of contract law. The view of the court covers matters that are of property and financial in nature and other issues that are relevant to the relationship.