1. In the case study given, the president of Big Bank does not have any discretion to rescind the contract. Contract rescission is not available to any party when there is substantial performance from the other party. In this case, System Inc has performed a substantial percentage of the agreed tasks. As such the boss of Big Bank cannot rescind the contract. There are several circumstances when either party can rescind contract. For instance, when there is consent from the two parties, a contract can be rescinded. Hen consideration fails; a party can rescind the contract. A contract which is against the public interest can also be rescinded by either party (Chitty, 2009). A contract which is rescinded is not enforceable.
2 Although he does not have the discretion to rescind the contract, the Big Bank Boss can seek for legal remedy. For instance, he can sue for compensatory damages for the part of the contract that was not performed. Chances of him succeeding with this action are very high because it is not in doubt that here is partial breach of the contract. System Inc. can employ the defense of contract frustration where it becomes impossible to honor a contract.
3 There are several provisions in the contract that point out that rescinding the contract would not be in the best interest of Big Bank. First, the limitation of liability sets System Inc. free from taking any liability when the contract is rescinded. Specifically, clause 8 is to the effect that if delays may arise which are caused by natural disasters or unavoidable circumstances, System Inc. would not take liability. Because of this, it would not be Big Bank’s best interest to rescind the contract.
4 Amicable resolutions in contracts has always proved to be the best way of handling issues arising out of contracts when the two parties involved want to get the best solution without engaging the court process. In the contract dispute in question, this method can be highly successful (Parsons, 2003). However, it is not always that it will be successful. For instance, complex contracts where various points are contested cannot be solved using this process. In such a case, the legal process serves the purpose.
5 There are several differences and similarities between complete, substantial and material breach in contracts. Complete contracts are those whereby the parties have fulfilled their obligations as stated under the contract. Substantial contracts refer to contracts whereby a party has performed a large part of the contract. Material beach involves when one party has failed to perform a huge part of the contract. A contract whereby there is material breach can be rescinded (Williston, 2000). Substantial performance means a contract cannot be breached. Complete contracts connote a situation where all parties have performed their roles, hence there is no issue arising out of the contract.
6. This exercise has highlighted several important concepts. First, it addresses substantial performance of a contract and the remedies that are available to the aggrieved parties. Substantial performance bars a party to the contract from seeking judicial remedy. In this case, we get to learn that it would not be fair for Big Bank to rescind the contract. The exercise also gives a deep analysis of the three types of contract performance. The exercise also addresses contract rescission, explaining the circumstances which may lead to a contract being rescinded. All these concepts are crucial while negotiating contracts.
References
Chitty, J., & Paine, W. (2009). A treatise on the law of contracts (15th ed.). London: Sweet and Maxwell.
Parsons, T. (2003). The law of contracts (Sixth ed.). Boston: Little, Brown, and.
Williston, S. (2000). The law of contracts. New York: Baker, Voorhis.
