Chapter 14 Performance and Discharge Flashcards
What is a breach of contract?
A contracting party’s failure to perform an absolute duty owed under a contract
Three types of performance
1) Complete performance
2) Substantial performance (minor breach)
3) Inferior performance (material breach)
What is performance to the satisfaction of another?
-if its personal, then it must satisfy one party. only personal satisfaction of the party fullfills the condition.
What is substantial performance?
a party who in good faith performs substantially all of the term of a contract can enforce the contract against the other party under this doctrine.
What is qualification for substantial performance?
- must not vary greatly from the performance promised in the contract
- must create substantially the same benefits
What is an exception to the performance satisfaction of another?
unless a court finds that the party is expressing dissatisfaction simply to avoid payment or otherwise is not acting in good fait
What is a material breach of contract?
a breach is material when performance is not at least substantial.
What are the consequences of material breach of contract?
if there is a material breach, the non-breaching party is excused from the performance of contractual duties and can sue for damages caused by a breach.
What is anticipatory repudiation?
an assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time.
common occurrence of anticipatory repudiation?
Sharp fluctuation of market price
Why is anticipatory repudiation treated as a material breach?
(1) the nonbreaching party should not be ready and willing to perform when one party isnt
(2) the nonbreaching party should have the opportunity to seek a familiar contract elsewhere and may have the duty to do so to minimize his or her loss
breaching party in anticipatory repudiation
-until the nonbreaching party treats it as a breach, the breaching party can retract the A.R. by proper notice and restore the parties to their original obligations
Discharge by agreement?
any contract can be discharged by agreement of the parties. the parties can even create a new contract for the express purpose of discharging the original contract
Ways to discharge by agreement?
mutual rescision, novation & Accord & Satisfaction
Mutual rescission?
an agreement between parties to cancel their contract, releasing the parties from further obligation under the contract. objective is to restore parties to postions they would have had if the contract had never been formed