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TL;DR: Novation replaces an existing contract with a new one, transferring obligations to another party.

Understanding Novation

Novation occurs when all parties involved agree to substitute a contract, replacing an old obligation with a new one.

Key Characteristics:

• Transfers Obligations Shifts contractual responsibilities to a new party.
• Requires Mutual Consent All involved parties must agree.
• Common in Business Transactions Often used in mergers, acquisitions, or loan transfers.

Example:

• Changing Service Providers If a business switches leasing companies, a novation agreement may transfer contract obligations.

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Sales contracts, especially in international trade, rely on precise terms to manage logistics. Incoterms (International Commercial Terms) define who handles shipping, insurance, and risk in sales transactions.

1. Definition and Purpose

Incoterms are globally recognized rules set by the International Chamber of Commerce to clarify responsibilities in sales contracts, reducing trade disputes.

2. Key Examples

• FOB (Free on Board): Seller delivers to the ship; buyer assumes risk thereafter.
• CIF (Cost, Insurance, Freight): Seller covers shipping and insurance to destination.

3. Scope in Sales

Used primarily in cross-border sales, Incoterms specify when risk and cost shift from seller to buyer.

Sales contracts are legally binding agreements governing the exchange of goods or services between buyers and sellers. A key term to understand is unconscionability, which can render contract terms unenforceable if they’re excessively unfair. Knowing this concept can protect you from exploitative sales deals.

1. Definition and Purpose

Unconscionability refers to contract terms so one-sided or oppressive that they “shock the conscience.” Courts may void such terms to prevent injustice, especially in sales contracts where bargaining power is unequal.

TL;DR: The “statute of limitations” sets the maximum time after an event within which legal proceedings may be initiated.

Understanding “Statute of Limitations”

This legal concept determines the timeframe within which parties must initiate legal action, varying based on jurisdiction and the nature of the claim.

Key Characteristics

• Time-Bound: Legal actions must be filed within a specific period.
• Varies by Case Type: Different claims have different limitation periods.
• Promotes Timely Resolution: Encourages prompt pursuit of legal remedies.

Examples

• Personal Injury Claims: May have a statute of limitations of two years.
• Breach of Contract: Could have a limitation period of four years.

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TL;DR: Estoppel prevents a person from contradicting previous statements or actions if someone else has relied on them.

Understanding Estoppel

Estoppel is a legal doctrine that stops a party from denying or asserting something contradictory to their previous actions or statements if another party has relied upon them.

Key Characteristics:

• Prevents Injustice Stops unfair legal shifts.
• Requires Reliance One party must have acted based on the other’s statement.
• Common in Contracts & Litigation Used to ensure fairness.

Examples:

• Property Agreements If a landlord allows a tenant to stay rent-free, they may be estopped from demanding back rent.
• Employment Promises If an employer promises a raise but later refuses, estoppel could apply.

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