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Performance and Agreement

Performance and Agreement. What You Will Learn:. How to identify when time is important in a contract How to distinguish between satisfactory and substantial performance How to explain tender of performance How to explain how contracts can be discharged by agreement. Why It Is Important :.

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Performance and Agreement

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  1. Performance and Agreement What You Will Learn: • How to identify when time is important in a contract • How to distinguish between satisfactory and substantial performance • How to explain tender of performance • How to explain how contracts can be discharged by agreement Why It Is Important: Understanding when contracts come to an end will help you determine your legal rights and obligations in such situations

  2. Ending a Contract • When a contract comes to an end it is referred to as discharged • By performance or by agreement • Discharge by Performance • Performance meaning the parties complete the terms of the contract • You promised to paint my house • I promised to pay you

  3. Time for Performance If time not stated, performance must be completed in a reasonable time Reasonable time varies with the circumstances of each case Tender of Performance Atender is an offer to do what you have agreed to do under a contract It is important to make tender even if you know the other party will not perform their part of the contract

  4. Satisfactory Performance When services are preformed for others, the law requires that they be done in a satisfactory manner Court will use the “reasonable person test” if there is a question as to the satisfactory performance One party will agree to perform services for another “to the other’s satisfaction.” If satisfied, the other party is bound to the contract Substantial Performance Is performance that is slightly less than full performance Fulfilled the major requirements, but has left only minor details incomplete

  5. Discharge by Agreement Contracts may be terminated by mutual agreement Mutual Release When two parties mutually agree to end their agreement Accord and Satisfaction When one contract is substituted for another Often used to settle honest disagreements or unforeseen circumstances regarding an amount owed

  6. Reviewing What You Learned • What is reasonable time for completing a contract? • What is the difference between satisfactory and substantial performance of a contract? • What is tender of performance? • How can contracts be discharged by agreement?

  7. Impossibility of Performance & Operation of Law What You Will Learn: • How to explain situations in which the law will permit a discharge by impossibility • How to identify discharges that occur by operation of law • How to define the statute of limitations • How to identify debts that cannot be discharged in bankruptcy Why It Is Important: Understanding when contracts are discharged by impossibility and by operation of law will help you know your legal rights and obligations in such situations

  8. Involuntary Discharge • Impossibility of Performance • Operation of Law • Discharge by Impossibility of Performance • a contract the become impossible to perform may be discharged and both parties released from their obligations • Death or Illness • Destruction of subject matter • Means of Performance • Illegality

  9. Death or Illness in a Personal Service Contract Contract will be discharged if the contract requires personal service Person selected for their ability Destruction of the Exact Subject Matter If the subject matter that is destroyed through no fault of either party Must occur after the contract accepted, but before carried out

  10. Means of Performance Sometimes the means for performance is destroyed and the contract can not be completed. You sign a contract to get a new roof, but your house burns down before the job is started. The house must exist for the contract to be performed Illegality Contract is void if performance is illegal at initiation. Same rule applies if performance becomes illegal after initiation.

  11. Discharge by Operation of Law Sometimes the best interest of society demands that a contract be terminated Wrongful Alteration Altering or changing a contract after acceptance Statute of Limitations When time voids your right to sue for performance You can’t “sleep on your rights” and expect help You can “stop the clock” and still collect damages Bankruptcy Set up for the discharging of debt Debtors used to go to prison

  12. Reviewing What You Learned • When will the law permit a discharge by impossibility? • When will the permit a discharge by operation of law? • What is the statute of limitations? • What debts cannot be discharged in bankruptcy?

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