Contract law & application
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Transcript of Contract law & application
Donna M. Kesot, CPCU ©February 19, 2013
Contract Law & Applications
Essential Elements
10
20
30
40
50
Estoppel
10
20
30
40
50
Breach of Contract
10
20
30
40
50
Contract Formation
10
20
30
40
50
Review
10
20
30
40
50
Category 1 questions follow
Quest
ion
Name 4 Essential Elements of a Contract
10
Answ
er
10
1. Agreement (an offer & acceptance)2. Capacity to contract3. Consideration4. Legal Purpose
Without ALL four, the contract is not legally enforceable
Quest
ion
3 Elements of an Offer
20
Answ
er
1. Intent to contract (conveyed with words of promise)
2. Definite Terms (parties, subject matter, price, time of performance)
3. Communication with other party (knowledge at completed performance)
20
Quest
ion
5 Essential Elements of duration & termination
30
Answ
er
1. Lapse of time2. Operation of Law (e.g. the subject of the contract
becomes illegal after the offer, or is destroyed before acceptance)
3. Offeree’s Rejection4. Counteroffers5. Offeror’s Revocation (prior to acceptance)
Once a contract arises, death/insanity does not terminate it unless it’s a personal service of the deceased/insane)
30
Quest
ion
6 Characteristics of Insurance Contracts
40
Answ
er
1. Conditional (e.g. payment conditioned on a covered loss)
2. Fortuitous & involve unequal amounts3. Utmost good faith4. Adhesion5. Indemnity6. Nontransferable (without insurer’s
written concent
40
Quest
ion
5 Essential Elents for an Insurance Contract
50
Answ
er
1. Type of Coverage2. Object/Premises to be Insured 3. Amount of Insurance4. The Insured’s Name (not the carrier)5. Duration of Coverage
50
Category 2 questions follow
Quest
ion
What is the doctrine of Estoppel?
10
Category 2
Answ
er
Estoppel is a legal principle that prohibits a party from asserting a claim or right that is inconsistent with that party’s past statement or conduct on which another party has detrimentally relied.
Led down the garden path either before or after the written contract
10
Category 2
Quest
ion
What 3 things trigger estoppel in Insurance Law?
20
Answ
er
1. False representation of a material fact2. Reasonable reliance on the
representation3. Resulting in injury or detriment to the
insured
20
Category 2
Quest
ion
How does waiver, estoppel, & election prevent the insurer from reviving a defense forfeited earlier?
30
Category 2
Answ
er
1. Waiver is intentional relinquishment of a known right in an existing contract
2. Estoppel is a legal principle that prohibits a party from asserting a claim or right that is inconsistent with hat party’s past statement or conduct on which another party has detrimentally relied.
3. Election is a voluntary act of choosing between two alternative rights
Give Examples 30
Category 2
Quest
ion
What is the Parol Evidence Rule?
40
Category 2
Answ
er
1. Parol evidence rule: In order to waive a right the contract must be in force
2. Prohibits oral evidence from being introduced into evidence
40
Category 2
Quest
ion
Describe 3 ways estoppel differs from waiver.
50
Category 2
Answ
er
1. Waiver is contractual in nature and rests upon agreement between parties. Estoppel is equitable in nature and arises from false misrepresentation
2. Waiver gives effect to the waiving party’s intention. Estoppel defeats the inequitable intent of the estopped party
3. The parol evidence rule applies to waiver but not to estoppel.
50
Category 2
Category 3 questions follow
Quest
ion
Repudiation v Anticipatory Breach
10
Category 3
Answ
er
Repudiation: A party’s refusal to meet obligations under a contract at time of performance
Anticipatory Beach: A party’s unequivocal indication before performance is due that she will not perform when performance is due
10
Category 3
Quest
ion
Material v Minor Breach
20
Category 3
Answ
er
Material Breach: Violation of the agreement that would justify an owner’s termination of the contract
Material v Minor Breach is a matter of degree• Extent of breaching party’s performance• Willfulness of the breach• Extent to which the non-breaching part
obtained benefits and can receive compensation
20
Category 3
Quest
ion
Name two equitable remedies
30
Category 3
Answ
er
1. Specific Performance2. Injunction
30
Category 3
Quest
ion
Bad Faith
40
Category 3
Answ
er
Intentional or reckless act, extreme or outrageous in nature causing severe emotional distress, that results in physical injury
Extracontractual Damages can be awarded for this breach
40
Category 3
Quest
ion
Explain each of the 5 types of damages awarded for breach of contract
50
Category 3
Answ
er
1. Compensatory Damages (indemnify for actual harm)
2. Consequential Damages (indemnify for indirect loss, foreseeable)
3. Punitive or Exemplary Damages (to punish recklessness, maliciousness, deceitfulness, to make an example)
4. Extracontractual Damages --breach of insurer’s duty of good faith --Intentional infiction of emotional distress or extreme & outrageous conduct5. Liquidated Damages (reasonable estimate of damages, in
contract) 50
Category 3
Category 4 questions follow
Quest
ion
3 elements that make an offer valid
10
Category 4
Answ
er
A valid offer requires:1. Intent to contract2. Definite terms3. Communication to offeree
Acceptance requires a valid offer & valid acceptance 10
Category 4
Quest
ion
Novation
20
Category 4
Answ
er
The substitution of a 3rd party for one of the original parties to a contract, releasing the original party from rights and obligations under the contract
20
Category 4
Quest
ion
A valid acceptance requires 3 things
30
Category 4
Answ
er
1. It must be made by the offeree2. It must be unconditional and
unequivocal3. The offeree must communicate the
acceptance to the offeror by appropriate word or act
30
Category 4
Quest
ion
Executory v Implied v Express Contracts
40
Category 4
Answ
er
Executory –not completely performed by one or both parties
Express—terms and intentions are explicitly stated
Implied—terms and intentions are indicated by the actions of the parties to the contract and the surrounding circumstances.
40
Category 4
Quest
ion
Void v Voidable Contracts
50
Category 4
Answ
er
Void – an agreement that never reaches contract status, based on an unenforceable agreement (i.e. illegal) , Not legally enforceable.
Voidable – one party can reject (avoid) based on some circumstance surrounding the contract execution.
50
Category 4
Category 5 questions follow
Quest
ion
Allegation
10
Category 5
Answ
er
A claim made in a complaint by a plainiff specifting what the plaintiff expects to prove to obtain a judgment against the defendant
10
Category 5
Quest
ion
Answer
20
Category 5
Answ
er
A document filed in court by a defendant responding to a plaintiff’s complaint and explaining why the plaintiff should not win the case.
20
Category 5
Quest
ion
Interrogatories
30
Category 5
Answ
er
Specific written questions or requests raised by one party to a lawsuit that the opposing party must answer in writing
30
Category 5
Quest
ion
Hearsay Rule
40
Category 5
Answ
er
The rule of evidence that prevents the admission of out of court statements not made under oath by a person who is unavailable to testify.
40
Category 5
Quest
ion
Civil Law v Common Law
50
Category 5
Answ
er
Civil Law has a foundation of law in Europe, Latin America, Scotland, Louisiana based on the French Code of Napoleon. The system relies on scholarly interpretation of their codes and constitutions, not court decision
Common Law is based on English law and ‘precedent.’ Law developed from court cases.
50
Category 5