Breach and Excuse

Question 1

substantial performance

Answer 1

no uncured material failure by the other party to render any such performance due at an earlier time

Question 2

breach

Answer 2

each party’s duty is a condition of the other party (1) not being in MB, and (2) that breach is uncured

Question 3

factors for material breach

Answer 3

• extent to which IP will be deprived of the benefit which he reasonably expected
• extent to which IP can be adequately compensated
• extent to which BP will suffer a forfeiture
• likelihood that BP will cure failure
• extent to which BP comports w standards of GF/FD

Question 4

cure

Answer 4

must be within a reasonable time

comes after a material breach

will IP be delayed in making substitute arrgmts? does agrmt provide that time is of the essence?

Question 5

divisibility

Answer 5

if K performances can be apportioned into equal parts, K is divisible

breach of one part of the K is not a breach of the other parts

courts may not apply divisibility doctrine if loss of one piece destroys purpose of K

Question 6

modern view of breach (237)

Answer 6

• all obligations are conditional
• material breach refers to SP
• if a party has SP, their breach is not material. if his breach is material, then he has not SP

Question 7

anticipatory repudiation

Answer 7

where a promisor, prior to the time set for performance of his promise, indicates that he will not perform when the time comes

TOTAL BREACH IF: obligor repudiates before has committed a breach by nonperformance AND before he has received all of agreed exchange for it from the IP

Question 8

nonrepudiating party’s options

Answer 8

(1) treat AP as total repudiation, sue immediately
(2) suspend own performance, wait to sue until performance date
(3) treat as an offer to rescind, treat K as discharged
(4) ignore & urge promisor to perform

should suspend performance. if continues to perform –> may be precluded from claiming damages for any loss that could have been avoided

Question 9

nullifying an anticipatory repudiation

Answer 9

by words
- IP notified before they have changed their position in reliance on repudiation
- IP notified before they have indicated to the RP that it considers the repudiation to be final

by conduct
- IP knows that orig conduct is no longer in existence
- IP has not materially changed their position in reliance on the repudiation
- IP has not indicated to RP that they consider the repudiation to be final

UCC –> retraction/nullification may be accomplished by any method clearly indicating to the IP that they intend to perform, but MUST include any assurances by the IP

Question 10

assurances of performance

Answer 10

R2K 251, UCC 2-609

if a party is afraid another party may repudiate, they have the right to demand adequate assurances

other party must use reasonable/best efforts to supply the assurances

Question 11

UCC perfect tender rule

Answer 11

in a K for the sale of goods, the goods and their delivery must conform to the K in every aspect. if the goods deviate even slightly from the terms of the K, then the seller has breached the K. buyer may elect to reject/accept goods, or may accept/reject some

Question 12

PTR does not apply to installment contracts

Answer 12

installment K –> both parties agree on separate deliveries, must be within same K

(not where seller unilaterally decides to make multiple deliveries OR separate Ks)

buyer may only reject where:
- nonconformity substantially impairs value of installment/contract
- cannot be cured

buyer must seasonably notify seller of cancellation

Question 13

impracticability

Answer 13

painful to perform

event occurs after formation but before performance

test:
(1) extreme and unreasonable difficulty/expense
(2) nonoccurrence was a basic assumption of parties

no reasonable alternative way to perform

Question 14

impracticability in the UCC/for sale of goods

Answer 14

more narrow –> only applies to seller

assumption that buyer can always pay

Question 15

events which are a basic assumption under which contract was made

Answer 15

• death/incapacity of someone required for performance
• destruction/deterioration/failure to come into existence of a thing necessary for performance
• govt regulation/order

includes:
- shortage of raw materials
- inability to convert raw materials into seller’s product b/c of contingencies
- crop failure

increases in costs do not count unless change nature of K

Question 16

frustration of purpose

Answer 16

pointless to perform

requirements:
- event leading to frustration occurs after formation
- parties did not reasonably foresee act/event occurring
- purpose of K has been destroyed by this act/event
- purpose of K was realized by both parties at time or formation

breach excused UNLESS assumed risk