Chapter 17: Performance, Breach, And Discharge Flashcards
Condition
And uncertain event that affects the duty of performance
Express condition
Performance explicitly made contingent on the happening or not happening of a stated event
Satisfaction
Express condition making performance contingent upon one parties approval of the other’s performance.
Subjective satisfaction
Approval based upon a party’s honestly held opinion
Objective satisfaction
approval based upon whether
a reasonable person would be
satisfied
Implied in fact condition
Contingency understood but not expressed by the parties
Implied in law condition
Contingency that arises from operation of law
Concurrent condition
Performance by the parties is to occur simultaneously
Condition precedent
An event that must or must not occur before performance is due
Condition subsequent
an event that terminates a
duty of performance
Discharge
Termination of a contractual duty
Performance
Fulfillment of a contractual obligation
Tender
Offer of performance
Breach
Wrongful failure to perform the terms of the contract
Material breach
nonperformance that significantly impairs the aggrieved party’s rights under the
contract; discharges the injured party from any further duty under the contract
Prevention of performance
one party’s substantial interference with or prevention of performance by the other constitutes a material breach
and discharges the other party to the contract
Perfect tender rule
standard under the Uniform Commercial Code that performance must comply
strictly with contractual duties and that any deviation discharges the injured party
Substantial performance
performance that is incomplete but does not defeat the purpose of the contract; does not discharge the injured party but entitles him to damages
Anticipatory repudiation
breach of a contract before performance is due by a party announcing that he will not perform or by committing an act that makes it impossible to perform; it is treated as a breach, allowing the nonrepudiating party to bring suit immediately
Unauthorized material alteration of written contract
an unauthorized and fraudulent alteration or change of a material term of a written
contract by a party to the contract discharges the entire contract
Mutual rescission
Agreement of the parties to terminate their contractual duties
Substituted contract
A new contract excepted in satisfaction of the parties’ duties under the original contract.
Accord and satisfaction
substituted performance (accord) and the discharge of the prior contractual obligation by performance of the new duty (satisfaction)
Noviation
Substituted contract involving a new third-party promisor or promisee
Subjective impossibility
a particular promisor-
but not all promisors–is
unable to perform; does not
discharge the promisor
Objective impossibility
No promisor is able to perform; generally discharges the promisor
Subsequent illegality
if performance becomes illegal
or impractical as a result of a
change in the law, the duty of
performance is discharged
Frustration of purpose
if a party’s principal purpose is
substantially frustrated without his fault by the occurrence of an event whose nonoccurrence was a basic assumption
on which the contract was made, the party’s remaining duties to render performance are discharged, unless the
party has assumed the risk
Commercial impracticality
where performance can be accomplished only under unforeseen and unjust hardship, the contract is discharged under the Code and the Restatement
Availability of restitution
A person who renders more advanced performance under contract that is discharged from possibility, subsequent illegality, frustration, or impracticability is entitled to restitution to prevent unjust enrichment of the other party.
Bankruptcy
discharge available to a
debtor who obtains an order
of discharge by the bankruptcy court
Statute of limitations
after the statute of limitations
has run, the debt is not discharged, but the creditor cannot maintain an action against the debtor
