Breach Flashcards
1
Q
When Does a Breach Occur
A
- if found that:
1) promisor = under absolute duty to perform AND
2) absolute duty has not been discharged - nonbreaching party who sues for breach must show they’re willing + able to peform but for breaching party’s failure
2
Q
Factors for Determining Materiality of Breach
A
- amount of benefit received by nonbreaching party
- adequacy of comp for damages to injured party
- extent of past performance by breaching party
- hardship to breaching party
- negligent or willful behavior of breaching party
- likelihood that breaching party will perform remainder of K
3
Q
Minor Breach
A
- minor if obligee gains substantial benefit of their bargain despite obligor’s defective performance
4
Q
Effect of Minor Breach
A
- does NOT relieve aggrieved party of their duty to perform under the K
- merely gives them right to damages (setoff) for the minor breach
5
Q
Material Breach
A
- if obligee doesn’t receive the substantial benefit of their bargain
6
Q
Effect of Material Breach
A
Nonbreaching party:
- may treat the contract as at and end (any duty of counterperformance owed by them is discharged) AND
- will have an immediate right to all remedies for breach of the entire K, including total damages
7
Q
Minor Breach Coupled w/ Anticipatory Repudiation
A
- nonbreaching party may treat as material breach -> may sue immediately for total damages + are permanently discharged from duty of further performance
- aggrieved party actually must NOT continue on b/c doing so would mean failure to mitigate damages
8
Q
Material Breach of Divisible Contract
A
- in divisible K, recovery available for substantial performance of a divisible party even where there has been a material breach of the entire K
9
Q
Timeliness of Performance
A
- failure to perform by time stated in K is generally NOT material breach if performance rendered w/in reasonable time
- BUT if nature of K makes timely performance essential, or if K expressly provides time is of the essence, then it IS a material breach
-> merely including date doesn’t mean time of essence
-> traditionally, any delay for K w/ time of essence provision was material, vs. modern cts look at whether vitally important + whether parties truly intended it to be material
10
Q
Article 2 - Perfect Tender Rule
A
- if goods or their delivery fail to comply w/ K in any way, buyer generally may reject all, accept all, or accept any commercial units + reject the rest
11
Q
Acceptance + Right to Reject
A
- acceptance generally cuts off buyer’s right to reject under perfect tender doctrine
12
Q
When Does a Buyer Accept Under Article 2
A
- if after reasonable opp to inspect goods, buyer indicates to seller that the goods conform to reqs or that they’ll keep the goods even though they fail to conform
- buyer fails to reject w/in reasonable time after tender or delivery of goods or fails to seasonably notify seller of rejection OR
- buyer does any act inconsistent w/ seller’s ownership
13
Q
Buyer’s Responsibility for Goods After rejection
A
- after rejection, buyer can’t treat goods as though they own them
- has ob to hold the goods w/ reasonable care at seller’s disposition for time sufficient to permit seller to remove them
- if seller has no agent/place of business w/in market area where goods rejected, merchant buyer has ob to obey any reasonable instructions re rejected goods
- if seller gives no instructions w/in reasonable time, buyer may:
1) reship to seller
2) store for seller’s account
3) resell them for seller’s account in public sale or private sale after giving seller reasonable notice of intent to resell (if resells, entitled to recover expenses + reasonable commission)
14
Q
What happens if buyer wrongfully exercises ownership over rejected goods?
A
- seller has action against buyer for conversion
15
Q
Buyer’s Right to Revoke Acceptance
A
- only available in limited situations
- BUT where proper, has the effect of rejection
- keep in mind this is under Article 2
