Key Concepts in Contract Law

Contractual Capacity

Individuals Lacking Capacity

• Minors (under 18 years of age)
• Individuals suffering from a mental disability
• Individuals who are intoxicated

Misrepresentation in Contracts

Types of Misrepresentation

• Fraudulent Misrepresentation
• Innocent Misrepresentation
• Negligent Misrepresentation

Proving Duress

Elements of Duress

• Demonstrate that illegitimate means were used.
• The illegitimate means used were a reason for entering the contract.
• The evidence presented is honest and accepted.

Undue Influence

Presumed Special Relationships

• Parent/Child
• Guardian/Ward
• Doctor/Patient

Discharge of Contracts

Primary Methods of Contract Discharge

• By Performance
• By Agreement
• By Frustration
• By Breach

Discharge by Agreement Methods

• Mutual Discharge
• Release
• Waiver
• Substitution

Recovering Damages

Elements for Damages Recovery

• Causation
• Remoteness
• Damages (actual loss)
• Mitigation of Damages

Types of Damages

• Nominal Damages
• Ordinary Damages
• Exemplary Damages

Standards of Performance

The standard for Strict Performance requires full or perfect compliance with the contract terms. In contrast, the standard for Substantial Performance is a slightly lower standard applied to duties that are difficult to perform without some deviation from perfection in minor respects.

Partial Performance

Under Partial Performance, the party who performed is usually not entitled to payment unless:

• There has been free and willing acceptance of partial performance by the party receiving the benefit.
• One party is prevented from performing by the other party.

Discharge by Frustration

Discharge by Frustration can only arise if:

• An unforeseen event occurs outside the control or knowledge of either party.
• It would be unjust to hold the parties to their original contract.

Discharge by Breach

Types of Contract Breach

There are two types of discharge by breach:

• Actual Breach
• Anticipatory Breach

Contractual Remedies

Specific Performance is a remedy compelling performance of a contract, while an Injunction is a restraining order.

Minors and Contracts

A minor can still avoid a contract within a reasonable time of attaining adulthood.

If a minor is independent from parents, it does not grant the minor capacity to contract.