1. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. Click your mouse anywhere on the screen when you are ready to advance the text within each slide. After the starburst appears behind the blue triangles, the slide is completely shown. You may click one of the blue triangles to move to the next slide or the previous slide.

3. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. “If you can’t give me your word of honor, will you give me your promise? ” Samuel Goldwyn, Hollywood producer

4. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A party is discharged when she has no more duties under a contract.  Most contracts are discharged by full performance.  Sometimes the parties discharge a contract by agreement.  Rescind means that they terminate it by mutual agreement.

5. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A condition is an event that must occur before a party becomes obligated under a contract.  How Conditions are Created Express Conditions -- No special language is necessary to create the condition, but it must be stated clearly somehow. Implied Conditions – The condition is not stated, but is clear from the agreement.

6. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Condition Precedent Must occur before a duty arises.  Condition Subsequent Must occur after the particular duty arises.  Concurrent Conditions Certain things must occur simultaneously.

7. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Strict Performance Performance that is exactly what promised; is usually not expected and failure to do so does not cause for discharge.  Substantial Performance A party that substantially performs its obligations will receive the full contract price, minus the value of any defects. A party that fails to perform substantially receives nothing on the contract and will only recover the value of the work, if any.

8. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A personal satisfaction contract is one which the promisee makes a personal, subjective evaluation of the promisor’s performance. A court uses a subjective standard only if assessing the work involves feelings, taste, or judgment and the contract explicitly demands personal satisfaction. In all other cases, a court applies an objective standard to the decision.

9. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  The Restatement (Second) of Contracts §205 states: “Every contract imposes upon each party a duty of good faith and fair dealings in its performance and its enforcement.”

10. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A time of the essence clause will generally make contract dates strictly enforceable.  Merely including a date for performance does not make time of the essence.

11. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Material Breach Generally courts will discharge only if a party committed a material breach.  Anticipatory Breach Anticipatory breach is committed by one party making it unmistakably clear that he will not honor the contract.  Statute of Limitations Will limit the time within which the injured party may file suit.

12. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  True Impossibility Something has happened making it utterly impossible to fulfill the promise.  Commercial Impracticability Some event has occurred that neither party anticipated, making the contract extra- ordinarily difficult and unfair to one party.  Frustration of Purpose Some event has occurred that neither party anticipated and the contract now has no value for one party.

13. © 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.