Changes to Contract Obligations

Question 1

Rescission

Answer 1

Mutual cancellation of contract.

• Arises if some perfromance obligation remains for each party and they both agreed to rescind the contract.
• Agreement to rescind is itself a new contract that excuses further perfromance for both parties on the origional contract obligations.
• Consideration required, unless contract governed by UCC

Question 2

Modification

Answer 2

Substitute agreement

• Parties to a contract agree to accept a new agreement in place of the existing contract.
• Consideration required, unless contract is governed by the UCC.
• Under accord and satisfaction, satisfy the accord is a condition for fulfillment of the origional contract oblications.

Question 3

Novation

Answer 3

Parties agree to substitute a new party to perfromm.

• The origional party is excused from perfromance and no longer has any contract obligations

Question 4

Novation v. Delegation

Answer 4

Delegation does not require both parties’ agreement and does not excuse the delegator’s liability on the contract.

Question 5

Accord & Satisfaction Definition

Answer 5

When both parties to an existing agreement agree to accept different perfromance in satisfaction of the existing obligation.

Question 6

Accord definition

Answer 6

Agreement to accept alternative perfromance in satisfaction of the existing ibligation

Question 7

Satisfaction Definition

Answer 7

Completion of the alterative performance

Question 8

Effect of Accord & Satisfaction

Answer 8

Excuses the origional obligation.

• If the accord is not satisfied, a party may sue on either the origional obligation or the accord
• An accord suspends the origional agreement until satisfaction, i.e. the parties cannot sue under the origional agreement if there has been an accord.