Contract Interpretation: Bad Contract
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1
Releases
Provisions in contracts, or full contracts, in which you give up a legal right to sue for harm that you have already suffered.
2
Exculpatory Clause.
A release that attempts to extinguish claims for future conduct—i.e., for conduct that takes place after the release is signed.
3
General Release
Also known as a broad release.
4
Limited Release
• A narrower release than a general release b/c it only releases claims relating to a particular incident or incidents, not claims relating to any event since the beginning of time, as in the prior example.
• Courts are more likely to fully enforce limited releases than general releases.
• Courts are more likely to fully enforce limited releases than general releases.
5
Incidental Beneficiary
A party who receives a benefit from the performance of a contract, but who was not intended by the parties to be a beneficiary.
6
Intended Beneficiary
When the parties to a contract intend that a third person receive a benefit from the performance of the contract.
7
Intended Beneficiary vs Incidental Beneficiary
• Intended Beneficiary: A party who receives a benefit from the performance of a contract, but who was not intended by the parties to be a beneficiary.
• Incidental Beneficiary: When the parties to a contract intend that a third person receive a benefit from the performance of the contract.
• Incidental Beneficiary: When the parties to a contract intend that a third person receive a benefit from the performance of the contract.
8
Intended Third-Party vs. Incidental Third-Party Beneficiaries
• Intended third-party beneficiaries may recover under a contract; intended beneficiaries may sue to enforce the agreement if the parties do not perform.
• Incidental third-party beneficiaries may not recover under a contract; incidental beneficiaries have no right to sue if the parties do not perform.
• Incidental third-party beneficiaries may not recover under a contract; incidental beneficiaries have no right to sue if the parties do not perform.
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