Question

In complete sentences, provide an answer to each of the following discussion questions:

1) Barry and Sue want to have Martin replace Sue as a party to their contract using assignment. Sue wants to make sure that she is discharged from all further obligations under the contract with Barry. From Sue's perspective, what should occur to achieve Sue's discharge objective?

2) Briefly describe the difference between compensatory damage  liquidated damages. If your contract has a provision for liquidated damages, what important factor must be present in order to enforce those liquidated damages?

Thank you!

Answer 1

1. Barry and Sue want to have Martin replace Sue as a party to their contract using assignment. Sue wants to make sure that she is discharged from all further obligations under the contract with Barry. From Sue’s perspective, what should occur to achieve Sue’s discharge objective.

Sue should consider a Discharge by Novation, which is the action when both parties agree to replace a third party for one of the original parties. For Sue to successfully achieve discharge there are requirements that must be met. Aprevious valid contract has been established, both parties including the third party haveagreed to a new contract, the replaced party obligations have been relinquished, and the new contract established is valid.

2. Briefly describe the difference between a compensatory damage and liquidated damages. If your contract has a provision for liquidated damages, what important factor must be present in order to enforce those liquidated damages?

Compensatory damages are damages that reward the party who is not at fault of breaching the contract for their losses or loss of the bargain. Liquidated damages are damages that are fixed or settled. They reward a certain dollar amount to be paid to the non-breaking party in the event of a future default or breach of contract occur. If a contract has a provision for liquidated damages, the most important factor that must be present in       order to enforce those liquidated damages is a fixed, determined, or settled dollar amount to be paid. The amount also must be reasonable and considers the actual or anticipated harm caused by the contract breach.