Changes to K Obligations

Question 1

recission

Answer 1

party’s mutual agreement to cancel k
- Neither finsihed: each party must have some some performance remaining for effective recission

NOTE: Creates new agreement: agreement to rescind is itself a new, binding K supported by consideration
- Except at-will employment

Question 2

recission limitations

Answer 2

1. rights of 3P beneficiary have vested
2. mutual rescission may be made orally UNLESS writing required if K to be rescinded is subject to SoF and/or UCC

Question 3

unilateral recission

Answer 3

when only one party wants to rescind the K
- usualy only granted when there is a defense to K enforcement or formation (eg, mistake, misrepresentation, duress, lack of consideration, etc)

ie, as distinguished from mutual rescission, whereby parties agree to rescind a K, unilateral recission often occurs as a court-ordered remedy where there is a valid defense to K enforcement or formation

Question 4

at-will employment (recission)

Answer 4

agreement may be terminated by either party
- permanent employment is generally considered to be “at will”

Question 5

modification

Answer 5

subsequent change to terms of K
- replaces existing K with new one immediately
- excuses OG obligations

Question 6

modification requirements

Answer 6

1. mutual assent: of the parties; and
2. consideration: generally found to be present b/c parties have limited their rights under OG K by modification
   - modern trend allows for modification if it’s fair and due to circumstances unanticipated when k was made

Question 7

UCC & modification

Answer 7

no consideration required for good-faith modification
- MUST be in writing if new k falls w/in SoF

CL requires consideration

Question 8

PER & modification

Answer 8

parol evidence is admissible to show subsequent modifications to K

Question 9

novation

Answer 9

agreement between all parties to substitute new party for existing party (including new party)
- OG party is excused and no longer has any K obligations or liabilities
- new party gets benefits and assumes duties that belonged to OG party to K

like OG party never existed

Question 10

novation requirements

Answer 10

1. a previous valid K,
2. all parties, including new party (or parties), agree to new K,
3. new K extinguishes K duties between OG parties, and
4. a new valid and enforceable K

Question 11

modification v. novation

Answer 11

• modification: occurs when parties change terms of OG k
• novation: new k that substitutes a new party into the original K

Question 12

delegation

Answer 12

one party unilaterally finds replacement party to perform
- OG party’s obligations NOT excused

Question 13

novation v. delegation

Answer 13

• novation: OG party excused
• delegation: OG party NOT excused

Question 14

accord & satisfaction

Answer 14

agreement to accept different performance to satisfy original, existing duty
- OG k obligations NOT excused until accord is satisfied
- can go after accord k or OG k

ET: look for “if…then…”

Question 15

accord

Answer 15

a new agreement to accept alternative performance in lieu of the OG performance obligation
- consideration generally required

ET: look for “if…then…”

Question 16

accord & consideration

Answer 16

consideration generally required

Consideration of lesser value: OK if new consideration is either:
1. different than OG bargained-for consideration,
2. to be paid to 3P, or
3. to resolve a good-faith dispute concerning OG k

Question 17

satisfaction

Answer 17

performance of the accord agreement
- discharges OG k and the accord

Question 18

effect of accord breach

Answer 18

a party may sue under either OG obligation or the accord if there has been no satisfaction

Question 19

modification v. accord

Answer 19

• modification: debt excused immediately
• accord: debt excused later