Contracts Flashcards

An anticipatory repudiation occurs when a party:

Answer: Unequivocally indicates before the due date that they will not perform

Anticipatory repudiation is an unequivocal statement or action before the performance date that the party will not perform, entitling the non-breaching party to treat it as a present breach.

The parol evidence rule prevents admission of prior or contemporaneous oral agreements to:

Answer: Contradict or vary the terms of a final integrated written contract

The parol evidence rule bars extrinsic evidence offered to contradict or vary the terms of a fully integrated written agreement, though exceptions exist for ambiguity, fraud, and conditions precedent.

Expectation damages in contract law are designed to put the non-breaching party:

Answer: In the position they would have been in had the contract been performed

Expectation damages — the standard contract remedy — protect the benefit of the bargain by placing the non-breaching party where full performance would have put them.

In Illinois, the implied covenant of good faith and fair dealing in contracts:

Answer: Is implied in every contract and governs the exercise of discretion within contract terms

Illinois recognizes the implied covenant of good faith and fair dealing as governing discretionary conduct within the scope of a contract, but it does not create independent obligations beyond contract terms.

Under the doctrine of frustration of purpose, a contract may be discharged when:

Answer: The principal purpose of the contract has been substantially frustrated by an unforeseeable event

Frustration of purpose discharges a contract when an unforeseeable supervening event destroys the principal purpose, even though performance remains technically possible.

A liquidated damages clause is enforceable in Illinois if:

Answer: Damages were difficult to estimate at the time of contracting and the amount is a reasonable forecast of actual harm

Illinois courts enforce liquidated damages clauses when actual damages are difficult to ascertain at contracting and the stipulated amount is a reasonable estimate of probable loss, not a penalty.