7. Excuse of Nonperformance of Contract because of Something that Happened (or did not Happen) After Contract was Made Flashcards
What is an Anticipatory Repudiation?
Anticipatory repudiation is an unambiguous statement or conduct
(i) that the repudiating party will not perform
(ii) made prior to the time that performance was due.
What is the effect of an anticipatory repudiation?
Anticipatory repudiation by one party excuses the other party’s duty to perform.
When does a claim for damages under anticipatory repudiation arise?
Anticipatory repudiation generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance.
Can an anticipatory repudiation be withdrawn?
Anticipatory repudiation can be withdrawn (retracted) so long as there has not been a material change in position by the other party.
What effect does a retracted anticipatory repudiation have on the duty to perform?
If the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until adequate assurance is provided.
What if the words or conduct of a party merely makes performance uncertain?
If the words or conduct of one party give “reasonable grounds for insecurity,” then the other party can, in writing, demand adequate assurance and if it is “commercially reasonable,” can suspend performance until it gets adequate assurance.
Divisible contract corollary:
In a “divisible contract” there can be a contract law recovery for substantial performance of a divisible part even though there has been a material breach of entire contract.
What is the standard for determining whether an express condition has occurred, i.e., been “satisfied”?
General rule – strict compliance is required for “satisfaction” of a
condition
Must a condition of personal satisfaction be strictly complied with?
Conditions of personal satisfaction of one of the contracting parties do not have to be strictly complied with. While the contract language is “only if X is satisfied with the work,” courts simply look to whether a reasonable person would be satisfied.
How can an express condition be eliminated so that its nonoccurrence does not affect performance obligations?
Some conditions benefit or protect only one of the two parties to the contract. If so, that person can waive the condition.
What if there is a written contract and prior to that written contract the parties orally agreed that performance was conditional?
Courts generally will consider evidence of such an oral agreement notwithstanding parol evidence rule(s)
What is an accord?
an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
What is the effect of the performance of an accord?
If the new agreement (“the accord”) is performed (satisfaction), then performance of the original obligation is excused.
What happens if an accord is not performed?
If the accord is not performed, then the other party can recover on either the original obligation or the accord
What is a modification?
Modification is an agreement by parties to an existing obligation to accept a different agreement in satisfaction of the existing obligation.
