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LAW 122 (625)
Chapter 11

Chapter 11 - Discharge and Breach (LAW 122)

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Law and Business
LAW 122
Andre Serero

-a contract is discharged when the parties are relieved of the need to do anything more under the contract -many ways in which a contract can be discharged Discharge by Performance -performance  when the parties fulfill all of the obligations contained in the contract -parties must perform exactly as the contract requires -any deviation from the terms of the contract is considered a breach rather than performance and will entitle the innocent party to a remedy Time of Performance  PG.252 -parties have to perform exactly as the contract says, the courts usually hold that time is not of essence -even if a contract states that performance must occur by a particular date, a party may be entitled to perform late -but it can be held liable for losses that the other party suffers as a result of the delay Tender of Payment  PG.253 -business people should be aware of some specific rules that govern payments 1.debtor has the primary obligation of locating the creditor and offering payment, even if the creditor has not asked for it 2.unless a contract says otherwise, creditor can insist on receiving legal tender -legal tender  payment of bills and coins to a certain value 3.debtor doesn’t have to actually tender payment if it would obviously be refused Tender of Performance -party is discharged of its duty to perform if the other party renders performance impossible ex. Owner of land may refuse to allow a building contractor onto the work site. The builder as the innocent party is entitled to sue to recover damages - damages  amount of money that the court may order the defendant to pay to the plaintiff Substantial Performance -party may be discharged from further obligations if it provides substantial performance -substantial performance  satisfies the contract but is defective or incomplete in some minor way -court will decide on a number of factors if substantial has occurred; nature of the defect & difference between the contract price and the cost of the curing the defect -door knobs example -entire contract  no part of the price is payable unless all of the work is done  EX. On PG.257 Discharge by Agreement -one or both parties can discharge a contract even though it was not fully performed -can occur in several ways: Option to Terminate - allows one or both of them to discharge the contract without the agreement of the other -most found in employment contracts; 2 months prior notice -usually a way in which the parties can agree, when initially creating a contract, that their obligations will be discharged Rescission  PG. 260 -after the contract has been made  replace with above note -a contract is executory if a party hasn’t fully performed its obligations -a contract is executed if a party has fully performed its obligations -if a contract is executory on both sides, it can be discharged through rescission -rescission  when the parties agree to bring their contract to an end Accord & Satisfaction -when a party gives up its right to demand contractual performance in return for some
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