Review Questions Plg1 Businessman Working Review Time Words
Review Questions Plg1 Businessman Working Review Time Wordse
Each module has a set of review questions to assist you in learning the materials and help you prepare for the final exam. Spend quality time responding to the following questions in your own words.
1. Describe the purpose of a third party beneficiary contract and explain two common types.
2. You have just won a contract with the federal government. You are the prime contractor and plan on using subcontractors. Explain the Privity of Contract Rule for this government contract.
3. What is breach of contract? Summarize the remedies available for breach of contract and damages.
4. Describe a liquidated damages clause and specify when this type of clause may be used in a business contract.
Provide your answers in a document and submit. Citations and references must be in current APA format. Use Miller, R. L., & Jentz, G. A. (2015). Fundamentals of business law summarized. Boston: Cengage.
Paper For Above instruction
In modern contract law, third party beneficiary contracts play a critical role by allowing individuals or entities outside the contractual agreement to benefit from its performance. The primary purpose of such contracts is to facilitate arrangements where one party intends to confer a benefit upon a third party, either intentionally or as a natural consequence of the contractual duties. There are two common types of third party beneficiary contracts: intended beneficiaries and incidental beneficiaries. Intended beneficiaries are those for whom the contract is specifically designed to benefit, and they generally possess the right to enforce the contract. Incidental beneficiaries, however, are unintended recipients of the contractual benefits and usually lack enforceable rights because the contract was not made with their benefit in mind (Miller & Jentz, 2015).
When implementing government contracts, especially where a private entity is awarded a federal project, understanding the privity of contract is crucial. Privity of contract refers to the direct legal relationship between the contracting parties—namely, the government and the prime contractor. Under federal procurement rules, the government does not establish privity directly with subcontractors; instead, the prime contractor maintains contractual relationships with both the government and subcontractors. This means that, generally, subcontractors do not have direct contractual rights against the government, which can complicate claims or disputes. However, provisions such as flow-down clauses and government regulations influence how contractual obligations and rights are managed (Miller & Jentz, 2015).
Breach of contract occurs when one party fails to fulfill its contractual obligations intentionally or unintentionally, thereby causing harm or loss to the other party. The remedies for breach vary depending on the severity and nature of the breach. Common remedies include specific performance—an order requiring the breaching party to fulfill their contractual duties, and damages—monetary compensation for losses incurred due to the breach. Damages can be compensatory, consequential, or liquidated, depending on what is suitable and agreed upon in the contract. The objective is to put the injured party in the position they would have occupied had the breach not occurred (Miller & Jentz, 2015).
Liquidated damages clauses are contractual provisions that predetermine the amount of damages to be paid if one party fails to perform. These clauses are particularly useful in projects where actual damages are difficult to quantify or prove. For example, in construction contracts, a liquidated damages clause might specify a fixed sum for each day of delay beyond the deadline. These clauses are enforceable when the sum predetermined is a reasonable estimate of actual damages at the time the contract is formed and not a penalty designed to punish the breaching party. Liquidated damages help ensure predictability and reduce litigation costs, but they must comply with legal standards to be valid (Miller & Jentz, 2015).
References
- Miller, R. L., & Jentz, G. A. (2015). Fundamentals of business law summarized. Boston: Cengage.