Assignment 3 Instructions

This assignment should be done after studying Units 6 and 7 and completing the quizzes for those Units. It is worth 10% of the final course mark.

Part A Mini Essay (50%):

After a contract has been formed and written down disputes can arise between the parties to it about the correct meaning of the words that have been used. If the parties can't resolve their differences the court may be called on to decide the proper meaning. The process used by a judge to decide such a dispute is called “contractual interpretation” as discussed in the text. It just means reading a contract carefully according to accepted legal principles in order to resolve any ambiguities or unclear wording. This Part of this assignment is about contractual interpretation. For some more information about this subject to help you answer the question read this Primer on Contractual Interpretation. The first seven “Precepts” in the Primer help to explain the contextual approach, while the ninth “Precept” elaborates on the “contra proferentem” principle.

Describe the literal approach to contractual interpretation and explain how it may cause problems. How might other approaches overcome this difficulty? Describe and explain them in the business context.

Marking Rubric

Marking Criteria	Comments	Mark
Identifies and explains the literal approach to interpretation of contracts and other business documents		/10
Observes a problem that may be caused for business people by using this approach		/10
Identifies and explains three other rules or principles used to interpret documents in business transactions		/30
Total		/50

Part B Mini Essay (50%):

“Reliance damages cannot be used to escape the consequences of a bad bargain.”

Explain the meaning of that statement in the context of business contracts. Explain the justification for that legal principle. Provide an example that illustrates your explanations.

Marking Rubric

Marking Criteria

Comments

Mark

Explains the meaning of reliance damages and compares them to other types of damage awards. Gives the rationale for this form of compensation

 

/10

Identifies a rule concerning the amount of reliance damages which may be awarded

 

/10

Explains how the rule mentioned above is applied in practice when calculating reliance damages

 

/10

Based on the previous discussion explains why “Reliance damages cannot be used to escape the consequences of a bad bargain.” Gives a hypothetical or real example illustrating that when the principles identified are applied the result is that reliance damages cannot be used to escape the consequences of a bad bargain.

 

/20

Total

/50