Английский язык для юристов. Предпринимательское право
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Failing to fulfill or accomplish a promise, contract, or obligation according to its terms defines nonperformance.
Parties to a contract may stipulate the time and conditions for termination and discharge as part of their agreement. They also may subsequently agree not to do what they had originally promised. The latter is the case when there is a mutual rescission of the contract, a waiver of performance by one or more of the parties, a novation, or an accord and satisfaction to liquidate an outstanding debt or obligation.
During contract negotiation, parties may agree to certain terms that provide for automatic termination upon the occurrence or nonoccurrence of stated events. These terms are categorized as conditions subsequent.
Contracting parties may, either before or after performance commences, rescind their contract as a result of further negotiation and by their mutual assent. Mutual rescission requires both parties to return to the other any consideration already received or to pay for any services or materials already entered.
When a party with the right to complain of the other party's unsatisfactory performance or nonperformance fails to complain, termination by waiver occurs. It is a voluntary relinquishing (waiver) of one's rights to demand performance. A waiver differs from a discharge by mutual rescission in that a waiver entails no obligation by the parties to return any consideration that may have been exchanged up to the moment of rescission. Discharge by waiver, when made, is complete in itself.
By novation, the parties to a contract mutually agree to replace one of the parties with a new party. The former, original, party is released from liability under the contract.
An accord and satisfaction is a resulting new agreement arising from a bona fide dispute between the parties as to the terms of their original agreement. The mutual agreement to the new terms is the accord; performance of the accord is the satisfaction. The accord, although agreed to, is not a binding agreement until the satisfaction has been made. The original agreement is not discharged, therefore, until the performance or satisfaction has been provided as promised.
A general release is a document expressing the intent of a creditor to release a debtor from obligations on an existing and valid debt. A general release terminates a debt and excuses the debtor of any future payment without the usual requirement that consideration be given in return.
Occasionally, it becomes impossible to perform a contract. Conditions that arise subsequent to the making of a contract may either void the agreement or make it voidable by one of the parties. Discharge through impossibility of performance may, in some situations, be allowed only if the specific and anticipated impossibility has been made a condition to the agreement.
The performance of a promised act may be discharged by operation of law. Some law that causes the parties to be discharged from their obligations, such as bankruptcy or the statute of limitations, comes into play.
A discharge in bankruptcy from a court will be allowed as a defense against the collection of most, but not all, debts of the bankrupt. Therefore, most contractual obligations to pay money come to an end when a party files for bankruptcy.
Statutes providing time limits within which suits may be brought are known as statutes of limitations. The statute of limitations does not technically void the debt, but it gives the debtor a defense against any demand for collection.
When contractual obligations terminate by agreement or by operation of law, no liability falls to either party. When one of the parties fails to carry out the terms of a contract, a breach of contract occurs and liability falls to the party who has not done what was promised. Breach of contract comes from negligent or intentionally wrongful performance, expressed repudiation of contractual obligations, or an abandonment of performance sometimes after performance has begun. When there is a breach of contract, the injured party has the right to a remedy in court.
Wrongful performance or nonperformance discharges the other party from further obligation and permits that party to bring suit to rescind the contract or to recover money to compensate that party for any loss sustained. Such compensation is known as damages.
An anticipatory breach (also called constructive breach) occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract even before being required to act. The repudiation must be clear and absolute. It must also indicate a deliberate and complete refusal to perform according to the terms of the contract. Injured parties may seek damages by showing that by relying on the contract.
Damages describe money awarded to parties who have been victimized or have suffered injury to their legal rights by others. Damages are of different kinds, and the nature of a claim usually determines what type of damages will apply.
A sum of money equal to the real financial loss suffered by the injured party defines actual damages. Since they are intended to compensate the injured party, actual damages are also called compensatory damages. Thus, damages awarded for nondelivery of promised goods or services would be an amount equal to the difference between the price stated in the contract and what the promisee would have to pay elsewhere.
Incidental damages and consequential damages are awarded for losses indirectly, but closely, attributable to a breach. Incidental damages cover any expenses paid out by the innocent party to prevent further loss. Consequential damages result indirectly from the breach because of special circumstances that exist with a particular contract. To recover consequential damages, the injured party must show that such losses were foreseeable when the contract was first made.