Business Law Unit 5 Seminar Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Welcome to class! Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

“To Do” List Complete the assigned textbook readings. Participate in the Unit Discussions. Complete the Assignment. Participate in the Seminar. Complete the Case Analysis. Take the Self-Check Quiz Please contact me via email if you need to make up any missing assignments. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Topics for Discussion Assignments Delegations Discussion topic: Aaron, a college student, signs a one-year lease agreement that runs from September 1 to August 31. The lease agreement specifies that the lease cannot be assigned without the landlord’s consent. In late may, Aaron decides not to go to summer school and assigns the balance of the lease (three months) to a close friend, Erica. The landlord objects to the assignment and denies Erica access to the apartment. Aaron claims that Erica is financially sound and should be allowed the full rights and privileges of an assignee. Discuss fully whether the landlord or Aaron is correct. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Assignments Transfer of contractual rights to a 3rd party (assignee). The assignee has the right to demand performance from the other original party (Obligor) to the contract. Cannot Assign rights for personal services or when obligor’s performance changes. CASE 11.1 Graham School and Dance Foundation, Inc. v. Martha Graham Center of Contemporary Dance, Inc. (2nd Circuit, 2004). Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Delegations Transfer of duties to a 3rd party (Delegatee) by Delegator. Delegatee owes duty to original party in contract. Delegator is still liable for performance of duty. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

“Assignment of All Rights” Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Third Party Beneficiaries 3P Intended Beneficiaries (Creditor and Donee) Original parties to K intend at the time of contracting that the contract performance directly benefit a 3rd party. After rights vest, 3P can sue for breach. 3P Incidental Beneficiaries. Benefit is unintentional. 3P has no rights. CASE 11.2 Revels v. Miss America Organization (North Carolina, 2007). Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Third Party Beneficiaries Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Contract Discharge Conditions to Performance: Condition is a possible future event that may or may not happen. Triggers or terminates performance. Condition Precedent: prior to performance. Condition Subsequent: follows initial performance. Concurrent: occur simultaneously. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Contract Discharge Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Discharge by Performance Complete vs Substantial Performance. Complete Performance: perfect performance under the contract. Substantial Performance: technically a minor breach but as long as in good faith, the non-breaching party remains liable to pay. Satisfaction Contract: performance is conditioned on reasonable satisfaction. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Discharge by Performance Material Breach of Contract. When performance is not substantial. Innocent party is excused from performance and has the right to sue for damages. A minor breach may be cured. Anticipatory Repudiation. One party gives notice of refusal to perform. Innocent party treats AR as material breach. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Discharge by Agreement Discharge By Mutual Rescission: parties must make another agreement. Discharge by Novation: new contract with substitution of a third party for one of the original parties. Accord and Satisfaction: settlement to discharge original contract. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Discharge by Operation of Law Contract Alteration. Statutes of Limitations. Bankruptcy. Impossibility of Performance (Objective). Party’s incapacitation. Subject matter is destroyed. Performance becomes illegal. Commercially impracticable. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Discharge by Operation of Law Temporary Impossibility. Suspends performance until the impossibility ceases. Commercial Impracticability. Performance may be excused when it becomes extremely more difficult or expensive than originally contemplated. CASE 11.3 Facto v. Pantagis (New Jersey, 2007). Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Question for Discussion! Aaron, a college student, signs a one-year lease agreement that runs from September 1 to August 31. The lease agreement specifies that the lease cannot be assigned without the landlord’s consent. In late may, Aaron decides not to go to summer school and assigns the balance of the lease (three months) to a close friend, Erica. The landlord objects to the assignment and denies Erica access to the apartment. Aaron claims that Erica is financially sound and should be allowed the full rights and privileges of an assignee. Discuss fully whether the landlord or Aaron is correct. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

Questions? Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.