Lwc1 Study Plan

Topics: Ethics, Contract, Business ethics Pages: 22 (4774 words) Published: May 5, 2013

Key Topics
1. Types of Contracts
2. Breach of Contracts
3. Remedies for Breach of Contracts

Study Questions
Chapter 10
1. What is the definition of a contract?
A promise that the law will enforce.

2. Describe the various types of contracts.
Bilateral - both parties make a promise.
Unilateral - One party makes a promise that the other party can accept only by doing something.
Express - The two parties explicitly state all important terms of their agreement.
Implied - The words and conduct of the parties indicate that they intended an agreement.

3. Identify and describe the theories of recovery in contract law.
Promissory estoppel - The defendant made a promise knowing the plaintiff would rely. The plaintiff did so. The only way to avoid injustice is to enforce the contract.
Quasi-contract - The plaintiff gave some benefit to the defendant. The plaintiff reasonably expected to be paid for the benefit and the defendant knew
this. The defendant would be unjustly enriched if he did not pay.

Chapter 17
1. What conditions would constitute a discharge of a contract?
Full performance, Discharge by agreement, Breach, Impossibility

2. Describe the conditions for a discharge of a contractual obligation.
Full performance - When one party performs as required, the contract is discharged.
Discharge by agreement - When both parties agree to not follow through with their agreement, the contract is discharged.
Breach - When one party breaches a contract, the contract is discharged.
Impossibility - Impossibility means that something has happened making it utterly impossible to do what the promisor said he would do.

3. Describe types of acceptable performance of a contract.
Strict performance - Performing to the exact standards of the agreement.
Substantial performance - An imperfect performance where the performer will receive the full contract price, minus the value of any defects. 4. What constitutes a breach of a contract?
Failing to perform a duty without a valid excuse.The two kinds of breach are material and anticipatory.

Chapter 18
1. What is the definition of remedies?
The method a court uses to compensate an injured party.

2. Describe the various types of remedies in contracts.
Injunction - An order forcing someone to do something, or refrain from doing something.
Expectation interest - The expectation interest is designed to put the injured party in the position she would have been in had both sides fully performed their obligations.
Reliance interest - The reliance interest is designed to put the injured party in the position he would have been in had the parties never entered into a contract.
Restitution interest - The restitution interest is designed to return to the injured party a benefit that he has conferred on the other party, which it would be unjust to leave with that person.

Consequential damages - Consequential damages are those resulting from the unique circumstances of this injured party.
Compensatory damages - Damages that flow directly from the contract.
Incidental damages - The relatively minor costs that the injured party suffers when responding to the breach.
Reformation - A process in which a court will partially “re-write” a contract.

3. Identify and describe the theories of recovery in contract law
Mitigation of damages - A party injured by a breach of contract may not recover for damages that he could have avoided with reasonable efforts.
Nominal damages - A token sum, such as one dollar, given to a plaintiff who
demonstrates that the defendant breached the contract but cannot prove damages.
Liquidated damages - A liquidated damages clause is a provision stating in advance how much a party must pay if it breaches.
Punitive damages - designed not to compensate the injured party but to
punish the...
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