Questions and Answers
What is the definition of a condition in a contract?
What is a condition precedent?
A condition that must occur before a party to a contract has an obligation to perform under the contract.
What does a condition subsequent refer to?
An event whose occurrence or lack thereof terminates a contract.
Define concurrent condition.
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What is meant by the term 'tender' in a contract?
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How are most contracts discharged?
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What is the implication of 'time of performance' in a contract?
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What happens when no time is specified in a contract?
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What does the waiver of essence of time limitation refer to?
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What occurs when time is essential in a contract?
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What is the meaning of 'substantial performance'?
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What does the fault of the complaining party entail?
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What is rescission in contract law?
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Which of the following can discharge a contract?
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What constitutes discharge by impossibility?
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What happens if a specific subject matter of a contract is destroyed?
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What does the term 'commercial impracticability' refer to?
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What is the statute of limitations?
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What is a release in contract law?
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What provides the definition for force majeure?
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Study Notes
Discharge of Contracts Terms and Definitions
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Condition: Stipulation in a contract classified into conditions precedent, subsequent, and concurrent.
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Condition Precedent: An obligation triggered by an event that must occur before a party's performance is required (e.g., marriage requirement before boat ownership).
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Condition Subsequent: An event that, if it occurs, terminates an existing contract (e.g., failing a drug test ends employment).
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Concurrent Condition: Mutual dependencies where both parties perform simultaneously (e.g., payment upon delivery).
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Tender: An actual offer to perform, particularly in making a payment.
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Normal Discharge of Contract: Most contracts are concluded through performance.
Payment and Time Considerations
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Payment as Performance: Specific application of payments by the debtor is obligatory, especially if designated by the creditor.
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Time of Performance: Obligations should be completed within a specified timeframe outlined in the contract.
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No Time Specified: Implies performance must occur within a reasonable timeframe based on circumstances.
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Waiver of Essence of Time Limitation: A time provision can be waived if a party requests performance after the deadline.
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When Time is Essential: A clearly defined timeframe for performance creates a breach if not met, allowing for claims of damages.
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Adequacy of Performance: Substantial performance allows for compensation minus any defects; perfection isn't required.
Discharges and Rescissions
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Discharge by Unilateral Action: Certain contracts allow one party to cancel unilaterally through a notice.
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Rescission: A party may nullify a contract upon breach by the other party.
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Consumer Protection Rescission: Provides consumers a chance to reconsider transactions, often allowing for rescission within a few days.
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Discharge of Agreement: Contracts can be ended through mutual agreement, new contracts, or specific original provisions.
Issues Causing Discharge
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Destruction of Particular Subject Matter: Contracts referencing specific items are terminated if those items are destroyed through no fault of either party.
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Commercial Impracticability: Performance becomes excessively burdensome due to unforeseen events may be a valid defense.
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Frustration of Purpose Doctrine: If the fundamental purpose of a contract is thwarted unexpectedly, parties may be excused from performance.
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Temporary Impossibility: Conditional suspension of performance due to temporary obstacles; performance must not cause an undue burden later.
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Bankruptcy: Legal process allowing debtors to relinquish assets for creditor distribution, leading to discharge from most debts.
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Statute of Limitations: Each state has varying time limits for initiating lawsuits; missing these can bar claims permanently.
Others
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Release: An arrangement relinquishing claims or potential claims against liable parties.
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Waiver: Giving up a known right or objection.
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Force Majeure: Legal doctrine excusing performance due to unforeseen events beyond control (e.g., natural disasters).
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Act of the Other Party: Discharge may occur if one party's interference prevents performance of the contract.
Overall, understanding these contract discharge terms is crucial for navigating legal obligations and rights effectively.
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Explore key concepts of discharge of contracts in Business Law with these flashcards. Learn important definitions and classifications, including conditions precedent and conditions subsequent. This quiz will help reinforce your understanding of contract stipulations essential for any legal professional.