intro.tolaw contracts) #5

8/8/2019 Intro.tolaw Contracts) #5

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Introduction to Law

Contracts

Unit #5


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- Introduction- Making a contract- Capacity of parties- Terms of the contract- Exemption/exclusion clauses- Vitiating factors- Discharge of contract- Remedies


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Introduction

Model:- 2 parties : may be extended to 3

partiesetc. - Relationship of the parties: rights & duties- Context : different needs & environment

requires different adaptation of the model- Enforcement of rights- Negotiation different stages


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Definition of contract:

A contract is an agreement

between 2 or more partieswhich is enforceable at law.


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Format of a Contract

May be in writing, by word of mouth (orally) by conduct, orby any combination of such.


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Contract law = foundation of all commercialactivities

Wide range of contracts:e.g. simple consumer contracts to construction

contracts, sale and purchase agreements in

conveyancing (real estate sales) transactions.


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General principle

Freedom of contract everyone is free to

enter into any contract


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Exceptions :

(1) Those against public morality(2) Those against national security(3) Those against public interests

(4) Those regulated by statutes for protection of consumers (e.g. Sale of Goods, Control of Exemption Clauses) and employees (e.g.Employment)


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(5) Those provide for regulating certainrelationships Landlord and Tenants. Thoserequire specific formalities - Conveyancingtransactions (e.g. Conveyancing andProperties Ordinance)

(6) Domestic agreements with no intention tocreate legal relationships e.g. pre-maritalarrangements, separation agreements


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Making a Contract

1. Unilateral and Bilateral Contracts

2. Essential elements of a contract


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Unilateral and Bilateral Contracts

Unilateral contract the performanceremains outstanding on 1 party only (i.e. theofferor), while the other party (i.e. theofferee/acceptor) having already performedwhat is required of it.


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ExampleAd -

Anyone who found my puppy, Buggie whichhas a name tag on its collar and return it to meshall be rewarded $1000.

Mr A

Mr B found the puppy and returned it to Mr A.Mr A refused to pay Mr B $1000 but onlyagreeing to pay him $500. Can B sue A ? If so,for how much ?


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Anyone who found my puppy, Buggie whichhas a name tag on its collar and return it to meshall be rewarded.

Mr AMr B found the puppy and returned it to Mr A.

Mr A is only willing to pay $1 to Mr B. CanMr B sue him ? If so, for how much ?


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Anyone who found my puppy, Buggie whichhas a name tag on its collar, please return himto me.

Mr A

Mr B found the puppy and returned it to Mr A.

Mr A thanked Mr B but refusing to pay him asingle cent. Can Mr B sue him ? If so, for howmuch ?


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Anyone who jumps into Victoria Harbour off Queens Pier and swims to Port Royal Pier shall be rewarded with $100,000.

Mr A

Mr Tung did so. Mr A refused to pay. Can MrTung sue Mr A ? If so, for how much ? Wouldit make any difference if Mr Tung did notreach Port Royal Pier ?


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Offer

A definite promise or proposal made by theofferor to the offeree (NB: not necessarily theperformer) with the intention to be bound by

such promise or proposal without furthernegotiation.e.g. I give you $100 for [your] doing some

work. e.g. I give you $100 for [your] not suing me. e.g. I will not sue you if you repay me $100.


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Acceptance

Acceptance comes into existence after theofferee unconditionally accepts the offer.

When 1 party introduces variations/conditions tothe terms of the latest proposal, there is noacceptance (i.e. conditional acceptance is not

acceptance). Such variations/conditionsamount to a counter-proposal/offer. Noagreement.


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Privity

General rule : A person who is not a party to acontract cannot sue upon it (i.e. right) or besued upon it (i.e.duty).

Exceptions:1. Statutory exceptions: Married Person

2. Contract made by an agent for his principal3. Rights/Benefits assigned/transferred (e.g.Covenants)


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Intention to create legal relationship

Both parties must intend that the agreement isto be binding on them (i.e. they have agreed tobear the duties under the contract).

Objective test : reasonable mans test


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Offer

Invitation to treat/offer - The proposal beforethe actual offere.g. goods catalogue, mail order catalogue,advertisements in newspaper, display of goodsin the shelves of a supermarket

offer for sale offensive weapons is illegal self-service window displaying a flick knifewith a price tag an invitation to treat


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Tenders

Invitation for tenders = invitation to treat

A bidder = an offeror

Company through an insurance broker invited

tenders from insurance companies to cover itsemployees medical & life insurance


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An advertisement may sometimes be an offerand sometimes be an invitation to treat thecrucial point definite intention to be bound


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Auction sales ads to sell goods by auctions =invitation to offerbidder = offeror

A person incurring expenses in going to theplace of auction cannot sue the auctioneer if the auction were not held because auctioneer is not bound to hold the auction.


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Offer must be communicated

Government offered a reward for capturingsome murderers C was an accomplice, sawthe ad but never addressed his mind to it andinformed the government.

Ruling: no reward to C


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Revocation of offer

General Rule : an offer can be revoked at anytime before acceptance.

Exception : when the offeror undertakes acontractual obligation or the offeror receivesconsideration to keep the offer open.


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Revocation of offer

General Rule: Revocation of an offer becomesbinding only when it has come to the knowledgeof the offeree.

Exceptions:(1) Letter of revocation sent to a commercial

organisation

(2) Offer to the public revocation takes placewhen the offeror had taken reasonable steps tobring it to the notice of the public


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Knowledge of revocation may be actual or implied

Date 1: D gave P a written offer to sell the houseand that the offer will open until 9:00 am on Date 3.Date 2: D sold the house to a 3/p and a 4/p informedP of the sale.Date 3: P wrote to P accepting his offer before9:00 am.

Held:1. Ps acceptance was too late he knew the propertyhad been sold.

2. D had effectively withdrawn his offer


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Lapse of offer

An offer lapses if it is not accepted within:

(1) A stipulated time; or(2) Reasonable time a question of factdepending on the circumstances of the case.


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Death of a party

(1) Death of the offeror : when the offereeaccepts the offer unaware of the offerors death, and the deceaseds contractualobligations can still be performed by hisestate, a valid contract exists. If the offereeknows of the offerors death, the offer cannotbe accepted.

(2) Death of the offeree: depends on theintention of the parties. If the offeree diesafter accepting the offer, check the initialproposal.


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Acceptance

Acceptance comes into existence upon theofferee unconditionally accepts the offer.

e.g. The offeree says, OK, I accept. Contrast with

e.g. The offeree says, I accept subject toconditions. e.g. The offeree says, I accept but..


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Cross offers

Party A - I promise to do X

Party B - I promise to do Y

There are 2 independent offers:

Crossing in mail ignorance of the othersoffer no contract


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Communication of acceptance General rule: Acceptance must be communicated.

Exceptions:1. Offeror waives the necessity to communicate acceptance

2. Certain conditions (like conduct of the offeree) can bedeemed to be acceptance3. Offeror may be estopped to deny his failure to receive

acceptance because of his own conduct (e.g. he did not readthe message)

4. Acceptance received by the offerors agent5. Postal acceptance rule: acceptance by posting (see later

notes)


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Silence

Silence is no acceptance. - Uncle said, I heard nomore from my nephew, I shall consider the horseis mine.Horse sold by mistake. Nephew never communicated acceptance to his uncle.

Held: No acceptance.

Contrast:P sent a draft contract to D offering to sell coal. D

did not expressly accept the offer but used thecoal when they were supplied.Held: Implied acceptance.


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Acceptance must be communicated by theofferee or his authorized agent.

P applied to be a headmaster. Managementboard agreed to accept his offer but thedecision was communicated by a member who

was not authorized.Held: No acceptance.


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Methods of acceptance

1. When method is prescribed by the offer, itmust be accepted by the prescribed method.

2. When methods are prescribed by the offer,acceptance by any such method.3. When no method is prescribed by the offer,

acceptance by an equally or moreefficacious or faster method is OK.


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When parties are not face to face

(1) By post and telegram Postal Rule

(2)Other instantaneous means of communication


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Postal Rule

Conditions of application:(1) Where post is the prescribed method of acceptance; or(2) It is reasonable to use post to send an acceptance;

Then, acceptance is deemed to be completed when theacceptance, properly stamped and addressed letter ofacceptance is posted ( Adams v Lindsell (1818) 1 B & Ald681:Date 1: D offered to sell goods to PDate 2 : letter reached P and P accepted by postDate 3: D sold the goods to a 3/p

Date 4: D received the acceptanceHeld: accptance)

The receipt of acceptance by D is irrelevant.


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Also applies to telegrams

Not applied: When offeror requires actual receipt of acceptance by him

When it is unreasonable to accept by post; When offer was made by email or fax; When the transaction involves large sums of money; When other methods are contemplated.

*Intention of the parties most crucial


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Postal rule does not apply to a revocation bypost

The offeree cannot be bound by a revocationwhen he is not aware of at the moment of acceptance, i.e. offeror sets up the rules, he isbound his own rules.


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Acceptance: instantaneous communications

Contracts concluded by instantaneous means of communicationlike email, telex, telephone, fax, etc. acceptance must bereceived by the offeror

P in London sent a telex to D in Amsterdam offering to buygoods from D. D sent a telex in return to P accepting the offer.

Held: acceptance must be received.

Contracts by email is governed by Electronic TransactionsLegislation.


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Consideration

Consideration = price of the offer= may be service, goods,

another promise.

Consideration must be sufficient but notadequate = of some value but need not be of

market value


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Consideration must be sufficient but not adequate:

D advertised for sale to the public records of the tuneRockin Shoes for 1s 6d and 3 chocolate wrappers.

Held: the 3 chocolate wrappers are consideration

Consideration must be executed or executory but notpast:

Executed consideration : Consideration of the offeree isthe performance of the required act.

Executory consideration : Consideration = offerees promise .


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Past Consideration

Past consideration is no consideration : P agreed with D topurchase a horse. D later guaranteed that the horse wasfree of lice (in fact, not). Held: Ps agreement is pastconsideration for the guarantee.

This rule is sometimes relaxed in favour of the offeree whohad suffered some loss: conditions:

1. act was done at the promisors request;2. parties understood that the act was to re: remunerated by

payment or conferment of some other benefits; and3. Payment or conferment of the benefits are enforceable if

it had been promised in advance.


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P sued D for agency fees. Q: whether introduction is past consideration

re: signing of inspection record (contract) ? Held: Yes + violation of principles of agency


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Consideration must move from the promisee:

Father deposited $ in a bank and the receiptindicated that the bank received money fromhim and his son. Father died.

Held: bank contacted with father and son.


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No consideration if:1. Performance of a public duty2. Performance of a personal legal duty3. Performance of an existing duty owed to the

same promisor

- gist: find extra bit of consideration


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Performance of an existing contracting duty owedto a third party is good consideration: promisorobtains direct benefit from the contract and has an

independent right to enforce the promise.

A contracted with B to unload Cs goods. C

contracted with A if B unloads the goods, C willnot sue A.Held: A is protected.


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Part payment of a debt (payment of a lesser sum) on the due date is no consideration for thesatisfaction of a larger debt.

B sued F. Both signed a settlement agreementthat F could pay principal by installments. Later,

B sued for interests due. Held: F did notprovide any consideration for the non-payment of interests.


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Exceptions

1. Goods of lesser value are given;2. Lesser sum is paid and other goods are given;3. Lesser sum is paid by a third party;4. Creditors claim is disputed in good faith; 5. Composition agreement;

6. Doctrine of promissory estoppel or equitableestoppel applies.

i f i bl l


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Doctrine of equitable estoppel(promissory estoppel)

1. Parties by their own act or own consent enterupon an agreement;

2. The agreement provides that the strict rightsunder another contract will not be enforcedor suspended; and

3. It would be inquitable to enforce it- the other party cannot enforce


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Forbearance to sue is good consideration inreturn for promisors promise but is not goodconsideration if the promisee knows, that he doesnot have any ground/cause of action against thepromisor.

If the promisor honestly believes or has

reasonable ground for believing he has a cause of action, such forbearance is still goodconsideration.


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PART # 2


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Consideration & Privity

A person who is not a party to a contactcannot sue upon it or be sued upon it.

D contracted with its buyer with a bottomprice clause. Its buyer contracted with S witha similar clause. S in breach of this clause.

Held: D cannot sue S as D is not aparty to the contract between the buyer and S.


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Exceptions

1. Statutes allowed such enforcement:- Married Person Status beneficiaries can sueon policies providing for them.- Motor Vehicles Insurance (Third PartyRisks) a person driving a vehicle can claimunder the insurance policy taken out by the carowner

2. Contract made by agent binds the principal3. Rights or benefits assigned under contract or

other instruments (Duties cannot be assigned)


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The Capacities of the Parties

There are 2 typical situations:1. Minors2. Mentally disordered, drunk or drugged

persons3. Companies


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Minors

Persons under 18 are minors with limitedcontractual capacities.

3 typical situations:1. Contracts for necessaries2. Contracts which are binding unless

repudiated by the minor3. Contracts which are unenforceable against

a minor unless ratified by the minor


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Contracts for necessaries

These includes contracts to provide the followingto a minor:

1. Goods2. Beneficial education/training/services

In the light of the minors status of life andthe environment


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Sales of Goods

Where necessaries are sold and delivered to aminor or infant, he or she must pay a reasonableprice I.e. only such contracts are binding on aminor

Necessaries means good suitable to thecondition in life of an infant or minor and to hisor her actual requirements at the time of the saleand delivery.

Questions:1. Is a tailor-made suit worth $50,000 necessaries ?

Contracts binding unless repudiated


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Contracts binding unless repudiatedby the minor

Both the contracting party and the minor arebound if making a contract:

1. Relating to an interests in land2. For the acquisition of shares in a company

3. To enter into a partnership agreement


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Contracts made by mentally


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Contracts made by mentallyhandicapped, drunk, drugged

Mental capacity of understanding the transactionis crucial. The same rules in minors apply to this

class.

Mental Health Patients have no contractualcapacity.


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Contract by Company

Contracts entered into by an officer who hasauthority to do so binds the company.Authority may be actual, apparent, or usual.


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Terms of a ContractMere representation and contractual terms Intention of the parties Contractual liability in

respect of any particular statement ?

Consider:1. Statements made in preliminary negotiations2. Statements made at the conclusion time3. Statements made by persons with special skill

& knowledge4. Statements made by persons without such

skill & knowledge


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Expressed & Implied Terms

Expressed terms - Terms that are expressedagreed by the parties orally, in writing or partlyorally, partly in writing.

Implied terms - Terms that work on thepresumed intention of the parties to give effectto the business efficacies of the contract.


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4. By legislation Every contract of salegoods implied terms:(1) seller has the right to sell;(2) goods are of selling quality;(3) goods are fit for the purpose;

(4) goods correspond with thedescription.

d ( d )


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Expressed terms (Conditions & warranties)Differences between conditions and warranties:

1. Even a minor breach of a condition entitles the other party toterminate the contract and sue for damages. Breach of awarranty (that excludes repudiation) does not entitle theother party to terminate the contract; he can only sue for

damages.2. Breach of a condition can be waived by the innocent party.

The innocent party may also lose the right to terminate thecontract.

How to distinguish conditions and warranties: intention of the parties reasonable man test


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Expressed terms

The courts look into the effects of the breachrather than the pre-fixed dichotomy of conditions/warranties. If the breach goes to theroot of contract, the innocent party can terminatethe contract and/or sue for damages(likecondition). If it does not, he can only sue fordamages (like warranty).

Example: seaworthiness of vessel in question commercial purpose not frustrated.


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Interpretation & Construction of Terms

Parol evidence - No extrinsicevidence, oral or written, relating tomatters outside the contract can be givento contradict, vary or add to the writtenterms of the contract.


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Exceptions to Parol Evidence

1. Only parts of the contract are in writing -purchase of shares bought and sold notesproduced acceptable.

2. Where it is necessary to allow extrinsicevidence to prove that the contract had notcome into operation - condition notsatisfied no contract

3. Where there are causes affecting the validityof the contract (i.e. no consideration, identityof the subject matter id of the ship)


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4. Where the law permits implying of certainterms into the contract.

5. Where there is a collateral contract Conveyance transaction vendor gaveassurance that the drains are in good order a collateral contract implied term


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Exemption/Exclusion clauses

Such clauses aim to exempt / excludeliability of the relying party (usually bigcommercial enterprises) and are often used in

standard form contracts.

Courts do not favor such clauses and willinterpret them strictly against the relying party.


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To be effective, such clauses must pass a 3stage test:

1. Incorporation into contract ?2. Clear and wide enough to protect the relying

party ?3. No contravention of the law


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Incorporation

By:(1) Signature Signature without looking

bound

(2) Reasonable notice

(3) Consistent cause of dealings similardocuments read into the current contract


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When Ineffective

(1) When they attempt to exempt liability for deathor personal injuries.

(2) When they attempt to exempt liability in respectof sellers implied undertaking as to title.

(3) When they attempt to exempt liability in respectof sellers obligations in respect of quality.

General test of reasonableness: objectivetest all the circumstances which the partiesknew or should have known at the time of contracting.


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Vitiating Factors

A contract may be tainted by defects that couldaffect its validity making it void, voidable, illegal orunenforceable. Vitiating factors include:

1. Mistake2. Misrepresentation3. Duress4. Undue influence

5. Unconscionable contracts6. Illegality7. Restraint of trade


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Mistakes

3 types:1. Common mistakes2. Mutual mistakes3. Unilateral mistakes


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Common Mistakes

Common mistakes as to the existence of the subjectmatter:- contract for the sale of corn unknown to theparties, corn went bad Held : no contract

Common mistakes as to ownership of the subjectmatter:- contract for sale of a fishery- mistake as toownership Held: void

Common mistakes as to quality of the subject matter:- unless of some fundamental nature, contract -Not void.

M l Mi k


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Mutual Mistakes

No meeting of minds no contract- mistake as to the lots of goods Held: nocontract

l l k


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Unilateral Mistake

Mistake by one party while the other party knowsthe truth. Mainly on identity of the parties. Normally3 parties are involved:

1. The innocent party who is mistaken

2. The rogue3. The innocent party who was being mistaken (takenadvantage of)

2 situations:a. Contracts made by correspondenceb. Contracts made face to face

C d b d


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Contracts made by correspondence

Effect: Contract void

A ordered some handkerchiefs from B andsold them to C (being absolutely innocent).

Held: A does not have a good title, cannottherefore transfer a good title to C.

Contracts made face to face


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Contracts made face to face Contract may be voidable.

A pretended to be a rich and famous person,bought a diamond ring from B. He sold the ring to C,dishonored the check and then disappeared.

Held: valid contract and was bound. Bcannot claim the ring from C.

(1) What the innocent contracting partythought he was contracting with? (2) Is the identityvital influence his decision to contract or not ?

Mi i


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Misrepresentation

A false representation of fact made orallyor in writing or by conduct.

R i M B


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Representation Must Be

1. On existing facts2. On false existing facts3. On false material existing facts

4. Induce the innocent contracting party to enter into thecontract

5. the innocent party has suffered loss as a result of suchinducement

Sale of a village house (own property, 700 sq.ft) with garden(leased) under misrepresentation

Di i i h F


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Distinguish From

1. Future facts2. Intention of future conduct3. Opinion

T f Mi i


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Types of Misrepresentation

(1) Fraudulent

(2) Innocent

(3) Negligent


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P i F d


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Proving Fraud

Fraud is proved if the misrepresentation is made by the maker:1.Knowingly2.Without belief in its truth, or3.Recklessly (dont care if it is true or not)

An honest belief at the material time is a good defense direct representation that the company could run trams by steamor mechanical power reality: it could not do so An honestbelief- Held: good defense

D said that there were interested parties to buy the sharesand led P to purchase them reality: no interested buyer and Dknew that at the time of making rep Held: fraud .

R di f F d


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Remedies for Fraud

Depends on whether fraudulent misrepresentationhad become a term of the contract :a. Become a term the other party may:

(1) rescind the contract, or

(2) affirm the contract and claim damagesfor breach of contract,

(3) affirm the contract and claim damagesunder the tort of deceit

b. Not become a term the other party may:(1) rescind the contract, and/or(2) claim damages under the tort of deceit


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Duty exists with special relationshipsbetween representor and representee, e.g.professionals in their areas of expertise

Remedies: rescission, damages and/orindemnity. Court has a wide discretion to

affirm the contract and award damages inlieu of rescission.

Duress


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DuressActual or threatened violence, or unlawful

restraint or threats, directed towards the contractingparty or a member of his closed family.

Effect : contract voidable

Former chairman threatened to kill the MDunless company bought back his shares companydid so held: voidable

Rationale: no free choice ; negate consentno genuine intention to contract

Economic Duress


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Economic DuressApparent consent is induced by illegitimate

economic pressure from the other party.

Consent is revocable contract isvoidableRemedy: voidable

Right to avoid may be lost if the innocentparty chooses to affirm.

Undue Influence


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Undue Influence

Conditions:

(1) A relationship between the parties;

(2) One party acquired over another ameasure of influence or ascendancy;and

(3) The ascendant person takes unfairadvantage.

Types of Undue Influence


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Types of Undue Influence

1. Actual undue influence

2. Presumed undue influence

Actual Undue Influence


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Actual Undue Influence1. The wrongdoer had the capacity to influence

the complainant;2. Influence was in fact exerted;3. Influence was undue;

4. The effect: the complainant enter into thecontract- sufficient: the influence was a significant

reason for causing- no need to prove manifestly disadvantage

Effect: Contract voidable

Presumed Undue Influence


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Presumed Undue Influence

1. A relationship of trust and confidence betweenthe wrongdoer and the innocent party;

2. The nature of the relationship is of a nature thatit is fair to presume that the wrongdoer hadabused that relationship a rebuttablepresumption

3. Procuring the innocent party to enter into

contract; and4. The contract was manifestly disadvantageous to

the innocent party.

Undue influence can be rebutted by


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Undue influence can be rebutted by

a. The complainant had exercise free andindependent will; or

b. The complainant had full knowledgeand could not have been misled; or

c. The complainant had competent andindependent advice from another.

Unconscionable contracts


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Unconscionable contractsThe law takes a further step in protecting the

innocent under the doctrine of unconscionablecontracts.

Undue influence: the will of innocent partywas not independent.

Unconscionable contract: disadvantageposition (e.g. poverty, sickness, age, sex,infirmity of body and mind, drunkenness,illiteracy, lack of education, lack of assistance orexplanation where assistance is necessary) vis--vis the other party [and the other party knew it].



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- Applies only in consumer sales- The court may refuse to enforce, enforce theremainder of the contract, limit/revise/alter theunconscionable part of the contract

- The court may take the initiative to examinethe unconscionable provisions

- List of matters the court will consider: relativebargaining positions of the parties, etc.

Illegality


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Illegality

Contracts are not enforceable

Restraint of Trade


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Restraint of Trade

Applicable situation: one party agreesto restrict its freedom in the future tocarry on trade with other parties who arenot parties to this contract (viarestrictive covenants).

General rule


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General rule

Restrictive covenants are acceptableonly if they are reasonable with referenceto time and space and must not deprivethe livelihood of the party beingrestrained.

If restraint of trade is found, thecontract is void.

Typical Situations


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Typical Situations

(1)Employment contracts

(2)Sale of business(3)Sole agent agreement


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Performance/Defective Performance


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Performance/Defective Performance

A contract may be discharged byfull performance.

The exceptions:(1)Divisible contract(2)Substantial performance

- and be paid on a quantum meruit basis (i.e. pro rata basis).

Discharge by Agreement


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Discharge by Agreement

Accord and satisfaction:

Accord agreement

Satisfaction consideration

Discharge by Breach


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Discharge by Breach

2 types of breach:

(1) Repudiatory breach

(2) Anticipatory breach

Repudiatory breach


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Repudiatory breach

No performance by the contracted time,place and conditions

Effects:(1) Condition or term (with serious

consequences) innocent party can treat thecontract as discharged.

(2) Warranty or term (with less seriousconsequences) innocent party can onlysue for damages

Anticipatory Breach


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p y(1) A party express its intention not to perform,

(2) A party acts in such a way as to sow its intentionnot to perform

Remedies:

(1) The innocent party may accept the breach and treatthe contract as discharged then, and sue fordamages.

(2) The innocent party may wait until the due date andsue for loss incurred by him as a result of such abreach (i.e. damages) or may seek specificperformance.

Discharge by frustration


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g yWithout fault of either party, a contractual

obligation has become incapable of being performedbecause circumstances in which performance is calledfor would render it a thing radically different fromthat which was undertaken..

Extraneous change of circumstances which makesperformance impossible examine : the subjectmatter of the contract and ask: what are such

circumstances ?

Effect: Both parties need not perform contractdischarge

Examples


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Examples

(1) Subject matter destroyed Hall destroyed byfire contract discharged.(2) Expected event does not occur : Coronation

cases - King George VI sick rented premises

not served its purpose contract discharged.(3) Person to perform dies or falls ill - performer sick

on performance day contract discharged(4) Change in law making it impossible to perform -

no blockade clause turns impossible because ofchange of law contract discharged


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(5)Change in law makes performanceillegal - export of goods impossiblebecause of change in law discharged.

(6) Performance become radically different- landslide stopped construction work for 3.5 years discharged.

No frustration under


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No frustration under

(a)Performance more expensive(b)Self-induced frustration: failure to

apply for a license

Money paid lies where it falls except

when there is a total failure of consideration

Remedies


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Remedies

1. Damages (compensation for loss)2. Specific performance3. Injunction

Remoteness of damages reasonableforeseeable loss. Duty to mitigate-innocentparty must mitigate (minimize) its loss


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intro.tolaw contracts) #5

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