Breach/Excuse for Performance Flashcards
When may a party treat anticipatory repudiation as a total breach?
(1) There is an bilateral K with executory duties on each side
(2) The words/conduct of the repudiating party UNEQUIVOCALLY INDICATE that they are unable or unwilling to perform
Does failure to perform by time stated in the K constitute a material breach?
No, unless the K states that “time is of the essence” and/or circumstances indicate that time is of the essence
What is the effect of a minor versus a material breach?
If there is a minor breach, the non breaching party is still required to perform. They may seek damages for the minor breach.
If there is a material breach, the non breaching party may treat the K at an end and assert full damages.
What are the three tests of divisibility of a K?
1) Performance of each party is split into two or more parts.
2) Number of parts due from each party are the same.
3) Performance of each part by one party is agreed on as the equivalent of the corresponding part.
(Outcome may turn on fairness)
When does impracticability excuse a seller from performing under the UCC?
When it is fair to say the parties would not have placed the risk of the extraordinary circumstance on the seller.
What are the rights of a party to a divisible K who performed one unit, but fails to fully perform?
The party is entitled to the equivalent performance for that unit (non-breaching party may withhold counter performance for units the breaching party failed to perform)
When may a buyer reject goods in an installment K?
When the defect in the goods substantially impairs the value of the shipment and cannot be cured
When is an installment K breached based on defective goods?
When the value of the entire K is substantially impaired by the defective goods
What are the requirements for a buyer who rejects defective goods?
Buyer must reject within a reasonable time, give specific notice of the defect, and hold the goods with reasonable care for a sufficient time to allow the buyer to reclaim them.
When may a buyer revoke acceptance of defective goods?
When the defect substantially impairs the value of the goods to the buyer, and they accepted the goods because of the difficulty of discovering defects or the seller’s assurances that the goods conformed.
What is the rule regarding prospective inability/unwillingness to perform?
When a party has reasonable grounds to believe that the other party will be unable/unwilling to perform at a specified time, they may suspend performance until they receive adequate assurances and are excused from performance if assurances are not given.
When does a seller’s right to cure extend beyond the original time specific for performance in the contract?
When the seller reasonably believed that goods would conform, based on trade practices/prior dealings with the buyer or because the seller could not have discovered the defects through proper business conduct.
What factors does a court consider to determine when there had been a material breach?
The extent of performance received by the non-breaching party/benefit conferred on non-breaching party, the adequacy of damages, negligent/willful conduct by the breaching party, hardship to the breaching party
What is the constructive condition of performance?
Each party’s duty to perform under a contract is conditioned on the other party’s performance
When is the constructive condition of performance excused?
The constructive condition of performance is excused when a party renders substantial performance (minor breach).
