Breach Defense

Question 1

Analyzing

Answer 1

1. Is the event that occurred unforeseeable?
2. The party asking relief is not at fault.
3. The thing breached is a basic assumption for making the contract.
4. The party asking for relief did not assume the risk.

Question 2

Is it Impossible?

Answer 2

Where the existence of a specific thing or person is, either by the terms of a bargain or in contemplation of both parties, necessary for the performance of a promise in the bargain, a duty to perform promise

• Never arises if at the time the bargain is made the existence of the thing or person within the time for seasonable performance is impossible, and
• Is discharged if the thing or person subsequently is not existence in time for seasonable performance, unless contrary intention is manifested, or the contributing fault of the promisor causes the non-existence.

1. Material deterioration of such a specific thing or physical incapacity of such a specific person as is within the rule stated Subsection (1) has the same effect as non-existence in preventing a promisor’s duty from arising or in discharging it, except that if the other party’s remains ready and willing to render in full the agreed exchange for whatever performance remains possible, the promisor is under a duty to render such partial performance.

Question 3

Is it Impracticable? Restatement

Answer 3

Where, after a contract is made, a party’s performance is made impracticable without their fault by the occurrence of an event the non-occurrence of which was a basic assumption, on which the contract was made, their duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.

Question 4

Impacticable UCC

Answer 4

Except so far may have assumed a greater obligation and subject to the preceding section on substituted performance.

1. Not a breach of performance if impracticable to perform.
2. Seller may allocate resources to buyers.
3. Seller must seasonably notify buyers.

Question 5

Discharge by Supervening Frustration

Answer 5

After a contract is made, a party’s purpose for entering into a contract is frustrated then, they may discharge the remaining duties if

1. Not at fault,
2. Nonoccurrence of event was assumption of contract,
3. The language or circumstances do not excuse frustration.

Question 6

Events that make performance Impracticable

Answer 6

1. Death or disability of a person. (Service cannot be delegated)
2. Destruction of the subject matter of the contract.
3. Failure of a specific thing necessary for performance to come into existence.
4. Supervening governmental forces that make performance illegal.
5. A performance subjects a party to potential harm.
6. Shortage due to embargo or war.
7. Other circumstances that are “extreme and unreasonable”

Note: Increase cost must make performance of contract an “unreasonable expenditure.”

Question 7

Partial Impracticabilty

Answer 7

If substantial performance can be completed, then partial impracticability will discharge remaining performance only.

• Goods: The seller may allocate goods.

Question 8

Buyer Rights Full or Partial Impractability

Answer 8

Buyer who receives notices of material or indefinite delay that substantially impairs the value of the whole contract may:

1. Terminate and discharge any unexecuted portion of the contract, or
2. Modify the contract by agreeing to take a substitution.

If the buyer receives notification and fails to modify the contract within 30 days, the contract lapses with the remaining goods.

The seller assumes greater obligations.

Question 9

Mistake

Answer 9

Not duty to perform if:

1. The party raising the excuse, without fault, had no reason to know of the facts giving rise to Impracticability or frustration and
2. The nonexistence of such facts is a basic assumption of which the contract was made.

Question 10

Discharge by Supervening Frustration

Answer 10

After a contract is made, a party’s purpose for entering into a contract is frustrated then, they may discharge the remaining duties if

1. Not at fault,
2. Nonoccurrence of event was assumption of contract,
3. The language or circumstances do not excuse frustration.

Question 11

Existing Impractibility or Frustration at the time of Contract

Answer 11

No duty to perform if

1. The party raising the excuse, without fault, had no reason to know of the facts giving rise to Impracticability or frustration and
2. The nonexistence of such facts is a basic assumption of which the contract was made.

Question 12

Temporary Impracticability and Frustration

Answer 12

May suspend performance if there is a reasonable probability that substantial performance will not occur.

Question 13

Commercial Frustration

Answer 13

If the occurrence of an event, not foreseen by the parties and not caused by or under the control of either party or nearly destroys the value of the performance or the object or purpose of the contract, then the parties are excused from further performance. (If foreseeable then not excused) Elements:

1. Unforeseen, unexpected
2. Must not have assumed the risk
3. The performance is commercially impracticable.