7th issue: Ecuse of nonperformance of K (b/c of something that happened (or did not happen) AFTER K was made Flashcards
overall what to look for when EXCUSE of nonperformance of K
1) nonperformance of K and
2) SOMETHING HAPPENING (or not happening) AFTER K
excuse of performance b/c other party’s nonperformance
not pay because other party did not perform
excuse of performance b/c b/c other party saying it isnt going to perform is what
anticipatory repudiation
what needs to happen for anticipatory repudiation
1) UNAMBIGUOUS: statement or conduct that is
2) repudating party will not perform
3) made PRIOR to the time that performance was due
when does anticipatory repudiation happen
PRIOR to the time that performance is due
when can a party recover for anticipatory repudiation
generally: gives rise to an IMMEDIATE claim for damages breach
can party recover immediately for anticipatory repudiation
generally YES
x/c for when must wait under anticipatory repudiation to bring claim
the claimant has already finished performance
when can anticipatory repudiation be withdrawn
so long as there has not been a MATERIAL CHANGE in position by the other party.
- if the repudiation is timely retracted, the duty to perform is reimposed but performance can be delayed until ADEQUATE ASSURANCE is provided
if the repudiation is timely retracted, the duty to perform is reimposed but can be delayed until when
until ADEQUATE ASSURANCE is provided
does anticipatory repudiation need to be unambiguous
YES must be express and unambitious
sale of goods problem for insecurity
if words or conduct of one party give “REASONABLE GROUNDS FOR INSECURITY”, then the other party can, in writing, demand adequate assurance and if it COMMERCIALLY reasonable can suspend performance until it gets adequate assurance
sale of goods problem for insecurity elements
1) REASONABLE grounds for insecurity, and
2) WRITTEN DEMAND for adequate assurance and
3) COMMERCIALLY REASONABLE to stop performance
what is the excuse for improper performance for sale of goods
PERFECT TENDER RULE
what is excuse for improper performance for CL
MATERIAL BREACH
what are the 2 types of material breach under CL
1) material breach b/c of QUALITY of PERFORMANCE
2) material breach b/c of QUANTITY (amount) of performance
can damages be recovered for any breach
YES
under CL does every breach excuse performance
NO
under CL when will something not be a material breach
If there was SUBSTANTIAL PERFORMANCE then the breach is not material \
- if the breach was material ,then the performance was not substantial
what to remember for damages breach
1) every breach is allowed to get $ damages
2) CL only MATERIAL breaches EXCUSE performance
CL: what is the material breach b/c of quanitity (amount) of performance (divisible k)
therecan be a K recovery for SUBSTANTIAL PERFORMANCE of a divisible part even though there has been a material breach of entire K
- look to w/e price is stated as lump sum or on PER PERFORMANCE basis
how to determine if divisible K
look to w/e price is stated as lump sum or on PER PERFORMANCE basis
what is the common example of excuse of performance b/c of nonoccurrence of an EXPRESS condition
home sale K for getting a mortgage
what does an express condition do
LIMITS obligations created by other contract languge
triggering words for express condition
1) IF
2) ONLY IF
3) provided that
4) so long as
5) subject to
6) in the event that
7) unless
8) when
9) until
10) on condition that
ex of express condition
S and B enter into an AGREEMENT THAT STATES that B will buy and S will sell for 1k “on the condition that” a mortgage is no more than 4%
what is the std to determine if an express condition has occurred
STRICT COMPLIANCE is required for “sanctification” of condition
x/c for strict compliance of express condition
1) forfeiture: enforcement of condition would cause excessive harm to B
2) personal sanctification of one of the parties: honest and good faith dissatisfaction
is a condition fr personal satisfaction of one of the parties illusory promise
NO, has good faith dissatisfaction
1) w/e a reasonable person would be satisfied
who is the only person that can waive the express condition
ONLY PERSON PROTECTED by the condition can waive the condition
what is difference b/w conditions precedent and subsequent
precendent: excuse performance until and unless the condition occurs FIRST
2) subsequent: occurs after the start of performance and excuses further performance
do the conditions subsequent follow same laws as precedent
YES
- merely limit performance obligations otherwise created.
- require strict compliance
excuse by reason of a later K (4)
1) rescission (cancellation)
2) accord and satisfaction (substituted performance)
3) Modification (substituted agreement)
4) novation
recession (cancellation)
w/e performance is still remaining from each of the K parties (executory)
what does accord mean for excuse of K
parties already existing obligation to accept a DIFFERENT PERFORMANCE in satisfaction of existing obligation
do you need both accord and satisfaction to excuse K
YES
- if new agreement ( accord) is performed (satisfaction), then performance of the original obligation is excused
what if the satisfaction is not completed for the accord, what can the other part do
pick EITHER
1) original K OR
2) accord if no satisfaction to sue on
for modification (substituted agreement) can the non breaching party recover on the ORIGINAL K
NO. parties intended new K
what is a modification
an agreement by parties to an existing obligation to accept a different AGREEMENT in satisfaction of the existing obligation
words to look for accord instead of modification
If, THEN
rules for accord and modification
1) accord if not performed does not excuse K
2) substituted agreement is excuse even if not performed for original agreement
novation what is it
an agreement b/w BOTH parties to an existing K to the substitution of a NEW party
- same performance, different party
who is liable AFTER novation
novation excuses the contracted for performance of the party WHO IS SUBSTITUTED OR REPLACED
is the original party still liable for performance in the novation
NO
how is delegation different than novation
1) novation: requires BOTH parties of original K to agree and EXCUSE person replaced from any liability of non performance
2) delegation: DOES NOT require the agreement of both parties and DOES NOT excuse liability
generally what is the rule for impossibility (excuse from performance by a reason later unanticipated event)
1) which party is arguing that her performance is excused
2) what her performance is
3) w/e post contract occurrence affected her ABILITY to perform
- NOT JUST COST HER PERFORMANCE
if damage or destruction of subject matter of contract ART II
do the risk of loss risk
1) risk of loss on the buyer
then buyer pas
2) if risk of loss on the seller: w/e the B can recover damages from the seller depends
UCC what if the risk of loss is on the B
then buyer pays
UCC: what if risk of loss is on the seller and the destruction of IDENTIFIED GOODS
if IDENTIFIED GOODS and destroyed than seller is excused
UCC: what if risk of loss is on the seller and the destruction of anything no IDENTIFIED GOODS
then no excuse of performance and still must perform
what if a LATER law makes performance of a K illegal
excused by impossibility
what if a LATER law makes mutually understood purpose f K illegal
excuse by frustration of purpose
1) AFTER K
2) both parties KNOW of purpose of K AND
3) later event excused performance
generally does DEATH AFTER a K destroy obligation
NO. GR: death on K does not make persons K obligations disappear
does death of offer destroy offer
YES
does death AFTER a K make the obligation disappear
NO
x/c that death of party makes K disappear
SPECIAL person excuses performance
ex: will smith to perform
when to use detrimental reliance
- a factor in promissory estoppel
- doctrine used to avoid unjust enrichment, when there is NO CONTRACT
- only use it when NO K
when will courts not give specific performance as a remedy
where a BFP for value took the property
for personal service K where person is injured or sick are they discharged from performance by impossibility
yes, do not have to pay for damages
does accord discharge a K
NO only suspends a K
what is required for adequate assurances (elements)
1) REASONABLE (reasonably believes the other party can not perform)
2) WRITTEN demand for adequate assurances
3) if COMMERCIALLY reasonable (until the party so demanding receives adequate assurance, he may suspend his own performance.)
when must a part give adequate assurances when demanded upon them
in a reasonable time frame.
- if proper assurances are not given within a reasonable time frame, not to exceed 30 days, the party demanding assurances may treat the contract as repudiated
what if proper assurances are not given within a reasonable time (not to exceed 30 days)
the party demanding assurances may treat the K as repudiated.
when can a repudiating party withdraw repudiation
a repudiating party may at anytime BEFORE performance is due withdraw repudiation
x/c unless the other party has
1) canceled the K
2) materially changed his position in reliance on the repudiation or
3) otherwise indicated that he considers the repudiation final
what is the x/c where a repudiating party may at anytime BEFORE performance is due withdraw repudiation
unless the other party has
1) canceled the K
2) materially changed his position in reliance on the repudiation or
3) otherwise indicated that he considers the repudiation final
what does retraction of the repudiation do
reinstates the repudiating party’s rights under the K, if made before performance was due and the x/c do not apply
Gr for promise to pay legal obligation barred by law
Gr: promise to pay legal obligation that is barred by SOL is enforceable.
- Past obligation enforceable, x/c SOL in way, courts will enforce new promise if
1) in writing or
2) part performance
what is demand for adequate assurances
under art II if party has reasonably grounds for insecurity with respect to other party’s performance (reasonably believes the other party will not perform) he may demand assurances that the performance will be on time
must a demand for adequate assurances be in writing
yes
what if a party does not get adequate assurances once properly made
until the party so demanding receives adequate assurance, he may suspend his own performance
when must a party give response to adequate assurances
within a reasonable time, not to exceed 30 days, the party demanding assurances may treat the contract as repudiated
what if adequate assurances are not given within 30 days
the party demanding the assurances may treat the contract as repudiated
what are the non breaching parties rights under repudiation when adequate assurances not given
1) may treat the repudiation as a total breach and sue immediately
2) suspend his own performance and wait and sue until the performance date
3) treat the repudiation as an offer to rescind and treat the contract as discharged or
4) ignore the repudiation and urge the builder to perform
when can a repudiating party withdraw repudiation
any time before his performance is due
when can a repudiating party not withdraw repudiation (Even if performance is not due)
1) the other party has canceled the contract
2) materially changed his position in reliance on the repudiation or
3) otherwise indicated that he considers the repudiation final
how may withdrawal of repudiation be
in any manner that clearly indicates an intention to perform but must include any assurances justifiably demanded
reformation requirement
must be an agreement and there must be a variance between the agreement and the writing
What is reformation usually based upon
mutual mistake
can there be reformation for unilateral mistake
no because no meting of the minds, so no agreement to which the writing can be confirmed
unilateral mistake for rescinding contract
if only 1 party knows of the mistake about facts relating to the agreement and the nonmistaken party knew or should have known of the mistake, the contract is voidable by the mistaken party
for CL the condition of complete performance can be excused how?
complete performance may be excused if the party has rendered SUBSTANTIAL performance
how to determine if a breach is minor
if breach is minor the performance is substantial
how to determine if a breach is major
if a breach is major, the performance is not substantial
CL when will parties be excused from the contracts duties
when party fails to provide complete or substantial performance
how to determine if the breach is major
court looks at
1) the amount of benefit received
2) the adequacy of damages
3) extent of performance,
4) hardship to the breaching party
5) w/e the breach was negligent or willful.
