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Bar Contracts > 5) Performance, Modification, Excuse > Flashcards

5) Performance, Modification, Excuse Flashcards

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1
Q

UCC ROL: seller’s obligation

A

transfer and deliver goods

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2
Q

UCC ROL: buyer’s obligation

A

accept and pay for goods

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3
Q

UCC ROL: if seller bears ROL and something happens to goods…

A

seller must provide replacement goods

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4
Q

UCC ROL: if buyer bears ROL and something happens to goods…

A

buyer must pay k price regardless

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5
Q

UCC ROL: carrier case (def)

A

parties agree to use common carrier

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6
Q

UCC ROL: non-carrier case: when does ROL transfer to buyer?

A

1) if seller is NOT a merchant –> as soon as goods made available (tendered) to buyer
2) if seller IS a merchant –> when goods are physically in buyer’s possession

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7
Q

UCC ROL: carrier case: when does ROL transfer to buyer?

A

1) if shipment contract –> when goods delivered to carrier

2) if destination k –> when goods are tendered at the destination

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8
Q

UCC ROL: carrier case: shipment k: result

A

buyer bears ROL if goods damaged in transit

“FOB seller”

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9
Q

UCC ROL: carrier case: Destination k: result

A

seller bears ROL if goods damaged in transit

“FOB buyer”

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10
Q

FOB seller

A

shipment k (and so, buyer bears ROL in transit)

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11
Q

FOB buyer

A

destination k (and so, seller bears ROL in transit)

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12
Q

modification: CL rule

A

modification generally not ok, bc preexisting duty rule: promise to increase compensation for duties already owed is unenforceable bc no consideration for the modification

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13
Q

Modification (CL): preexisting duty rule

A

promise to increase compensation for duties already owed is unenforceable bc no consideration for the modification

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14
Q

modification (CL): exceptions

A

modification IS enforceable if:

1) mutual modification
2) unforeseen circs

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15
Q

modification (CL): excceptions: mutual modification: def

A

w changes on both sides (then you do have consideration)

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16
Q

modification (CL): exceptions: unforeseen circs: def

A

increased compensation is given bc performance is substantially more burdensome than reasonably anticipated (relaxation of CL rule)

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17
Q

modification (UCC):

A

agreement to modify existing k DNN consideration to be enforceable IF made in good faith

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18
Q

UCC vs. CL: modification

A

CL: usually no modification w/o consideration

UCC: dnn consideration for modification

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19
Q

result of faulty assumptions (mistake, impossibility, impracticability, frustration of purpose)

A

may excuse performance

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20
Q

mistake (def)

A

faulty assumption about present (at time of k-ing) material fact

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21
Q

unilateral mistake (rule)

A

1 party’s mistake re present material fact is NOT excuse (exception)

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22
Q

unilateral mistake: exception

A

if the other party knew or had reason to know of first party’s mistake, then first party’s performance excused

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23
Q

mutual mistake (rule)

A

k voidable (ie performance excused?) by disadvantaged part y if:

1) mistake assumption is re material facts
2) both parties made mistake
3) disadvantaged party did not bear the risk of mistake

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24
Q

mistake: example of not material term

A

value!

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25
Q

mistake: ways one party could bear the risk of the mistake

A

1) expressly delegated by k

2) circs: knew about the possible issue, etc.

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26
Q

mistake, impossibility, impracticability, frustration of purpose: UCC or CL?

A

both!

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27
Q

faulty assumptions re future facts: 3 kinds

A

1) impossibility
2) impracticability
3) frustration of purpose

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28
Q

impossibility (rule)

A

both parties excused if performance made impossible by events after k formed and:

1) impossibility = objective
2) contingency that created impossibility was unanticipated (not known to parties at time of making k)

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29
Q

impossibility: result

A

both parties excused from performance

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30
Q

impossibility: objective vs subjective: result

A

objective is one of the requirements. so if subjective, NO impossibility

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31
Q

impossibility: objective (def)

A

performance literally impossible for anyone, due to circs beyond control of the parties

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32
Q

impossibility: subjective (def)

A

performance becomes impossible bc of failure or fault of performing party (like not having $)

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33
Q

impossibility: objective: examples

A

1) specific subject matter of the k is destroyed
2) personal services k and person performing services died
3) supervening law has made performance illegal

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34
Q

impracticability: elements

A

Promisor MAY BE excused from performance if:

1) contingency causing impracticability was unforeseen AND
2) increased cost/burden of performance is FAR BEYOND what either party anticipated

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35
Q

impracticability: result

A

promisor MAY be excused from performance. note: extension of CL rule, courts still reluctant excuse nonperformance

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36
Q

impracticability: UCC exception

A

same rule EXCEPT: increased costs or even rise/collapse of market are viewed as business risks that k should’ve accounted for

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37
Q

impracticability: UCC exception: exs of things UCC still would consider impracticable

A

1) war/embargo
2) crop failure in whole area
3) natural disaster

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38
Q

impossibility, impracticability, frustration of purpose: exception

A

k can expressly allocate risks of these things, and then the cl/ucc analysis dn apply

39
Q

frustration of purpose (def)

A

contingency occurs that dramatically reduces value of performance to receiving party

40
Q

frustration of purpose (test)

A

performance can be excused if:

1) PRINCIPAL purpose of entering k is SUBSTANTIALLY frustrated
2) frustration is substantial in nature, not trivial
3) non-occurence of the event that caused the frustration was a basic assumption of the k

41
Q

excusing performance by agreement of the parties: ways

A

1) rescission

2) accord + satisfaction

42
Q

excusing/agreements: rescission (def)

A

1) only possible if both parties have remaining performance due
2) consideration bc each party discharges other’s duties (cancel each other out)

43
Q

excusing/agreements: when to use each

A

rescission: both parties have remaining performance due

accord and satisfaction: one party has performed, other has not

44
Q

excusing/agreements: accord (def)

A

accord: obligee promises to accept substituted performance (something different) in satisfaction of obligor’s duty

45
Q

excusing/agreements: satisfaction (def)

A

actually fulfilling the accord

46
Q

excusing/agreements: accord + satisfaction: rule

A

1) if performance by one party but not the other
2) can make accord to substitute performance
3) then must actually satisfy the accord
4) also need consideration

47
Q

excusing/agreements: accord + satisfaction: result

A

accord + satisfaction = satisfies obligor’s original obligation

(if just accord, DOES NOT discharge obligor’s duty – just suspends it)

48
Q

excusing/agreements: accord + satisfaction: what if accord, but no satisfaction?

A

DOES NOT discharge obligor’s duty – just suspends it

49
Q

excusing/agreements: accord + satisfaction: examples of consideration

A

1) substituted performance differs significantly from orig performance
2) substituted performance: obligation is doubtful
3) partial payment: good faith doubt re amt owed

50
Q

anticipatory repudiation: CL or UCC?

A

both!

51
Q

anticipatory repudiation: kinds

A

1) party’s definitive statement: “I will breach”
2) party’s voluntary act that renders it unable to perform its k obligation
3) failure to give adequate assurance

52
Q

anticipatory repudiation: failure to give adequate assurance: def

A

1) if reasonable grounds for insecurity, insecure party can make demand for adequate assurance of performance
2) other party fails to respond

53
Q

anticipatory repudiation: failure to give adequate assurance: ways to fail to rp

A

1) dn rp at all w/in reasonable time

2) dn rp in way that provides reasonable assurances (dn address specific concern)

54
Q

repudiation: RESULT

A

aggrieved party can:

1) cancel k, terminate all rights/obligations under it (ie be excused from its own performance)
2) sue for damages or specific performance
3) OR ignore repudiation, continue under k

55
Q

is repudiation retractable?

A

yes, until it’s too late

56
Q

repudiation: retraction: when is it too late?

A

if other party:

1) acts in reliance on repudiation OR
2) signals acceptance of repudiation to breaching party, OR
3) sues

57
Q

conditions: def

A

k conditions obligation to perform on some event/action by other party. Obligation triggered when the conditioning event occurs.

58
Q

conditions: CL: express condition: rule / result

A

any failure of express condition (less than 100% strict compliance) WILL DISCHARGE other party’s obligation to perform

59
Q

conditions: CL: express condition: def

A

clear language (ex: on condition that, as long as, when, provided that, “payment is due upon completion”)

60
Q

conditions: CL:express condition: exception

A

1) waiver

2) bad faith conduct

61
Q

conditions: CL:express condition: exceptions: result

A

since exception, even tho there was an express condition that failed, doesn’t discharge performance obligation of party

62
Q

conditions: CL:express condition: exception: waiver (def + note)

A

party who has been discharged from performing (bc of failed condition) can WAIVE right to discharge and perform anyway

note: some courts: mid-term modification –> need consideration

63
Q

conditions: CL:express condition: exception: bad faith conduct: def

A

when party acts in bad-faith to prevent the condition, that party’s performance obligation will not be discharged

64
Q

conditions: CL:express condition: exception: bad faith conduct: aka

A

“prevention doctrine”

65
Q

conditions: CL: implied conditions: def

A

all ks contain implied conditions even if none stated (“you paint, I’ll pay.”) Courts treat breach like implied condition failing.

66
Q

conditions: CL: implied conditions: 2 kinds

A

1) material breach

2) substantial performance

67
Q

conditions: CL: implied conditions: material breach: def

A

serious enough breach

68
Q

conditions: CL: implied conditions: material breach: result

A

court will treat like failure of an express condition. SO: aggrieved party is excused from his performance obligation

69
Q

conditions: CL: implied conditions: substantial performance: result

A

aggrieved party will NOT be discharged of its own performance obligations

70
Q

conditions: CL: implied conditions: substantial performance: def

A

breach is less serious, “close enough”

71
Q

conditions: CL: workarounds for breaching party where condition fails: kinds

A

1) divisibility

2) quantum meruit

72
Q

conditions: CL: workarounds for breaching party: divisibility (def)

A

k is divisible if easily apportioned into (pairs of) agreed equivalents (whole as sum of parts)

73
Q

conditions: CL: workarounds for breaching party: divisibility (result)

A

only part of k has been materially breached, rest can continue

74
Q

conditions: CL: workarounds for breaching party: quantum meruit (def)

A

if party failed to fulfill express condition or is in material breach, can still recover in quantum meruit

75
Q

conditions: CL: workarounds for breaching party: quantum meruit: remedies

A

1) reasonable value of benefits conferred

2) reduced by damages caused by breach

76
Q

substantial performance: UCC or CL?

A

CL only!

77
Q

material breach: UCC or CL?

A

CL only!

78
Q

conditions: UCC: perfect tender rule: def and note

A

seller is in breach if goods fail IN ANY RESPECT (even small) to conform to k

note: so every k term is like an express condition

79
Q

conditions: UCC: perfect tender rule: buyer’s options if seller fails to make perfect tender:

A

1) reject the goods
2) accept the goods
3) accept part, reject part

80
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: reject the goods: reqs

A

1) reject w/in reasonable time AND
2) notify seller

effect of not rejecting properly = it’s an acceptance!

81
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: result

A

buyer can sue for damages (unless cure)

82
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: accept goods: ways to accept

A

1) reasonable time to accept +

2) signifies acceptance

83
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: accept goods: ways to signify acceptance

A

1) say goods conform to k
2) take goods, despite nonconformance
3) fail to effectively reject, OR
4) any action inconsistent w seller owning the goods

84
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: accept goods: result

A

1) buyer must pay k price

2) can seek damages for nonconformity (IF notifies seller)

85
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: accept goods: can buyer revoke acceptance?

A

yes, if:
1) noncomformity substantially impairs value of goods AND

a) buyer accepted bc unaware of nonconformity, OR 2) seller asserted cure but failed to cure

86
Q

conditions: UCC: perfect tender rule: buyer’s options after seller failure: accept part and reject part: condition

A

can only work in commercial units (no half loaf of bread)

87
Q

conditions: UCC: work-arounds for breaching sellers: options and time

A

1) right to cure (before k dl)

2) right to cure IF reasonable grounds to believe delivery was acceptable (after k dl)

88
Q

conditions: UCC: work-arounds for breaching sellers: right to cure: elements

A

1) seller must give buyer reasonable notice of intent to cure AND
2) seller must make conforming delivery by k dl

89
Q

conditions: UCC: work-arounds for breaching sellers: right to cure when reasonable grounds to believe delivery was acceptable: elements

A

1) belief (that acceptable) must be based on buyer’s express assurances OR trade usage, course of dealing, course of perofrmance
2) seller must give buyer reasonable notice of intent to cure
3) must make confomring delivery w/in reasonable time

90
Q

conditions: UCC: perfect tender rule: exception

A

does NOT apply to installment ks!

91
Q

UCC: installment k: def

A

k that contemplates delivery of goods in separate lots, to be separately accepted by the buyer

92
Q

conditions: UCC: installment k rule re failure of conditions (and an exception)

A

buyer must give seller opportunity to cure any defects in installment delivery
UNLESS seller “substantially impairs” value of entire k

(NOT the perfect tender rule, it’s an exception!)

93
Q

is the breach material? (factors)

A

1) aggrieved party deprived of benefit
2) can aggrieved party be adequately compensated by damages
3) forfeiture of aggrieved party
4) breach willful or in bad faith?
5) likelihood that breacher will cure in reasonable time

Bar Contracts (9 decks)

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