Breach Flashcards
Two step analysis of breach? (CL)
Is there a breach?
Was it material? (Excuses performance).
What is a breach? (CL)
Breach:
(1) Failure to perform absolute duty and
(2) that duty is not discharged. (If no defense or excuse).
(3) Nonbreaching party who sues for breach must show that they are willing and able to perform.
Next step in analysis: Breach does not always excuse nonbreaching party’s performance.
When is a breach material and what does the nonbreaching party do?
If the nonbreaching party does not receive the substantial benefit of their
bargain, the breach is considered material.
If the breach is material, the nonbreaching party (1) may treat the contract as at an end; that is, any duty of counterperformance owed by them will be discharged,
and (2) will have an immediate right to all remedies for breach of the entire contract, including total damages.
When is a breach minor and what does the nonbreaching party do?
Minor breach = still got substantial benefit of their breach.
If the breaching party has substantially performed (no material breach), then nonbreaching must first perform and then pursue remedies for breach.
What happens if a minor breach is coupled w/anticipatory repudiaton?
Treat it as material breach.
How do you determine if a breach is material? (for essay answer only, not on MBE)
a.The amount of benefit received by the nonbreaching party
b. The adequacy of compensation for damages to the injured
party
c. The extent of part performance by the breaching party.
d. Hardship to the breaching party
e. Negligent or willful behavior of the breaching party AND
f. The likelihood that the breaching party will perform the
remainder of the contract (cure)
No % for substantial performance.
Is failure to perform in time a material breach?
Failure to perform within state time is NOT material breach if within reasonable time UNLESS contract makes time essential or states that time is of the essence. (Dates of performance does not make time material, court looks at all circumstances).
What happens if there is a breach under UCC?
Doesn’t follow CL substantial performance.
UCC Perfect Tender Rule: if goods
or their delivery fail to conform to the contract in any way, the buyer
generally may reject all, accept all, or accept any commercial units
and reject the rest.
Under the UCC, when is a buyer’s right to reject the perfect tender doctrine cut off?
Upon acceptance.
How does a buyer accept goods under the UCC?
Accepts under UCC 2 if:
Indicate goods conform to contract,
Indicate they’ll keep noncomforming goods,
Fail to reject w/in reasonable time,
Fail to notify seller of rejection,
Act inconsistent w/seller’s ownership.
When can acceptance be revoked under UCC 2?
The buyer may revoke their acceptance if the goods have a defect that
substantially impairs their value to the buyer and:
- They accepted the goods on the reasonable belief that
the defect would be cured and it has not been OR
- They accepted the goods because of the difficulty of
discovering the defects or because of the seller’s assurance
that the goods conformed to the contract
Revocation of acceptance must occur: (1) within a reasonable time
after the buyer discovers or should have discovered the defects;
and (2) before any substantial change in the goods occurs that is
not caused by a defect present at the time the seller relinquished
possession.
Can a buyer reject half units under the UCC 2?
If buyer doesn’t want to reject or accept the whole, then rejection and and acceptance must be in commercial unit. (one truck, not just their favorite part).
If the perfect tender rule isn’t met, can the seller cure?
Seller Can Cure by Notice and New Tender Within Time
for Performance and Buyer has to accept.
Is there anyway that the seller has a right to cure nonconfirming goods beyond the original contract time?
if the buyer rejects a tender of
nonconforming goods that the seller reasonably believed
would be acceptable “with or without money allowance,”
the seller, upon a reasonable notification to the buyer, has
a further reasonable time beyond the original contract
time within which to make a conforming tender. A seller will
probably be found to have had reasonable cause to believe
that the tender would be acceptable if the seller can show
that (1) trade practices or prior dealings with the buyer led the
seller to believe that the goods would be acceptable, or (2)
the seller could not have known of the defect despite proper
business conduct (for example, packaged goods purchased
from a supplier).
Under the UCC, what is the buyer’s right to reject for installment contracts?
Installment can be rejected only if the nonconformity substantially impairs the value of that installment.
Moreover, the installment contract as a whole is deemed to be breached only if the nonconformity substantially impairs the value of the entire contract.
