Breach of Contract “a situation in which one of the parties to a contract fails or otherwise refuses to perform the obligations established in that contract”

Conditions Resulting in Breach 1) performance is not completed within the time limits agreed to by the parties 1) performance is not completed within the time limits agreed to by the parties 2) performance has been negligent or unskillful 2) performance has been negligent or unskillful 3) wrongful performance or nonperformance 3) wrongful performance or nonperformance

Remedies for Breach 1) Damages 1) Damages 2)Equitable Remedies 2)Equitable Remedies

Damages Compensatory (Actual) Compensatory (Actual) Incidental and Consequential Incidental and Consequential Punitive (Exemplary) Punitive (Exemplary) Nominal Nominal Liquidated Liquidated

Equitable Remedies Two most common: 1) specific performance 1) specific performance 2) injunction 2) injunction

Third Party Contracts and Assignments Third Party: a person who may in some way, be affected by a contract but who is not one of the contracting parties (outside party) Third Party: a person who may in some way, be affected by a contract but who is not one of the contracting parties (outside party) Third Party Beneficiary: “person not party to a contract, but whom parties intended to benefit” Third Party Beneficiary: “person not party to a contract, but whom parties intended to benefit”

Third Party Beneficiary Types: 1) creditor beneficiary 1) creditor beneficiary 2) donee beneficiary 2) donee beneficiary

Assignments means whereby one party in a contract conveys right to another person, who is not a party to the original contract means whereby one party in a contract conveys right to another person, who is not a party to the original contract 3 parties involved: 3 parties involved: 1) assignor 1) assignor 2) assignee 2) assignee 3) obligor: the remaining party to the original agreement 3) obligor: the remaining party to the original agreement

Commercial Paper (Negotiable Instruments) “a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit” “a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit” 2 basic types: 2 basic types: 1) notes (including CDs) 1) notes (including CDs) 2) checks (including drafts) 2) checks (including drafts)

“Promises to Pay” (Promise Instruments) Notes: Notes: 1) promissory 1) promissory 2) demand: payable whenever the payee demands payment 2) demand: payable whenever the payee demands payment 3) installment: the principal together with the interest on the unpaid balance is payable in installments at specified times 3) installment: the principal together with the interest on the unpaid balance is payable in installments at specified times Parties: maker and payee Parties: maker and payee

Certificates of Deposit “the acknowledgement of a bank of a receipt of money with an agreement of repayment” “the acknowledgement of a bank of a receipt of money with an agreement of repayment” CD is a note of the bank CD is a note of the bank written for specific period of time written for specific period of time higher interest for longer-term CDs higher interest for longer-term CDs

“Orders to Pay” (Order Instruments) Drafts Drafts Checks Checks

Drafts “a written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time” “a written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time” more complicated than notes because they require 3 parties more complicated than notes because they require 3 parties Parties: drawer, drawee, and payee Parties: drawer, drawee, and payee

Drafts (cont’d) Money Order: type of draft that may be purchased from banks, post offices, telegraph companies, and express companies as a substitute for a check Money Order: type of draft that may be purchased from banks, post offices, telegraph companies, and express companies as a substitute for a check drawn on the funds of the organization that issues it drawn on the funds of the organization that issues it purchaser fills in their name and address and the name of the payee on the instrument purchaser fills in their name and address and the name of the payee on the instrument purchaser is given a receipt purchaser is given a receipt

Checks “an order by the depositor on the bank to pay a sum of money to a payee” “an order by the depositor on the bank to pay a sum of money to a payee” parties: drawer, person/business, bearer parties: drawer, person/business, bearer Types: 1) certified Types: 1) certified 2) cashier’s 2) cashier’s

Requirements of Negotiable Instruments 1) In Writing 1) In Writing 2) Signed by Maker or Drawer 2) Signed by Maker or Drawer 3) Unconditional Promise or Order to Pay 3) Unconditional Promise or Order to Pay 4) State a Fixed Amount of Money 4) State a Fixed Amount of Money 5) Payable on Demand or at a Definite Time 5) Payable on Demand or at a Definite Time 6) Payable to Order or to Bearer 6) Payable to Order or to Bearer Order Paper Order Paper Bearer Paper Bearer Paper

Transfer of Negotiable Instruments 2 methods: 2 methods: Negotiation: “the act of transferring ownership of a negotiable instrument to another party” Negotiation: “the act of transferring ownership of a negotiable instrument to another party” Indorsement: “the signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument” Indorsement: “the signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument”

Types of Indorsements Blank: “having no words other than the signature of the indorser” Blank: “having no words other than the signature of the indorser” Special: “designates the particular person to whom payment is to be made” Special: “designates the particular person to whom payment is to be made” Restrictive: “prevents the use of the instrument for anything except the stated use” Restrictive: “prevents the use of the instrument for anything except the stated use” Qualified: “limits the liability of the indorser” Qualified: “limits the liability of the indorser”

Mental Anguish “mental suffering resulting from grief, severe disappointment, indignation, wounded pride, shame, public humiliation, despair, etc. usually accompanied by physical injury or by an outrageous intentional or grossly negligent act” “mental suffering resulting from grief, severe disappointment, indignation, wounded pride, shame, public humiliation, despair, etc. usually accompanied by physical injury or by an outrageous intentional or grossly negligent act” Physical Impact Rule Physical Impact Rule

Exceptions to Physical Impact Rule Intentional Infliction of Mental Distress Intentional Infliction of Mental Distress Contractual Breaches Contractual Breaches Negligent Infliction of Mental Distress Negligent Infliction of Mental Distress Punitive Damages Punitive Damages

Negligence “failure to exercise ordinary care; omission to do something which a reasonable prudent person would do under ordinary circumstances or the doing of something which a reasonable and prudent person would not do; the lack of due care” “failure to exercise ordinary care; omission to do something which a reasonable prudent person would do under ordinary circumstances or the doing of something which a reasonable and prudent person would not do; the lack of due care” intentional or accidental intentional or accidental