Conditions

Question 1

Waiver of a Non-Material Condition

Answer 1

It’s binding even without consideration or reliance. (1) Did obligor manifest intent to disregard condition of its promise (I’ll perform regardless of the condition)? (2) Is condition non-material to the obligor’s interest?

Question 2

Waiver of a Material Condition

Answer 2

Waiver is not binding unless promisee gave consideration or it caused reliance from the promisee

Question 3

Estoppel

Answer 3

Based on promisor’s words regardless of actual intent or promisor seemed to ignore the apparent failure of the condition. Reliance is always essential to estoppel! Did promisee reasonably rely on promisor’s words/conduct?

Question 4

Election

Answer 4

Election: Promisor’s manifested decision to perform, or delay in deciding whether to perform after the failure of condition. Time required to declare decision is reasonable time considering the promisee’s predicament. Proof of promisee’s reliance isn’t essential (but a promisee’s need for decision is a factor).

Question 5

Ways to Qualify a Promise

Answer 5

(1) Promise effort, not result. (2) Draft an express condition or sell “as is” (disclaim warranty). (3) Assert an Implied Condition on some “basic assumption”.

Question 6

Impossibility/Impracticability

Answer 6

Basic assumption about the future that makes it very difficult or impossible to perform a duty.

Question 7

Frustration of Purpose

Answer 7

Loss of usefulness of :thing” to buyer.

Question 8

Mutual Mistake

Answer 8

Basic assumption of both parties that was mistaken and materially affects value of contract for party seeking relief. In fairness, the party seeking relief should be excused and the effect is that the duty is excused, no breach, with mutual restitution if needed. Does not always lead to relief if party seeking excuse knowingly accepted risk of unknown fact.

Question 9

Anticipatory Breach

Answer 9

Anticipatory Breach: an immediate breach of that party’s duty, excusing constructive conditions of its duty. Anticipatory breach is either by the obligor’s (1) repudiation or (2) own act causing its inability to perform.

Question 10

Demand for Assurance

Answer 10

Obliged having reasonable basis to believe obligor will commit total breach may (1) demand assurance and (2) suspend it’s own performance while it awaits assurance. Obligor’s failure to provide assurance is repudiation! UCC: Demand must be in writing; implied 30 day deadline absent express one.

Question 11

Failure of Constructive Condition

Answer 11

Substantial performance fulfills constructive condition of other party’s performance. Only an uncurled material breach excuses an injured party either temporarily or forever.

Question 12

Material Breach Factors

Answer 12

(1) Nature of loss (2) Is cure practical? (3) Forfeiture v. Offset (4) Bad faith?

Question 13

Warranty of Merchantability

Answer 13

Requires only that goods are of average or passing quality.

Question 14

Perfect Tender Rule

Answer 14

If goods or tender of delivery fail in any respect to conform to contract, buyer may reject and refuse to pay.

Question 15

4 Exceptions to Perfect Tender Rule

Answer 15

(1) Parties can agree to different standard. (2) Implied warranty of merchantability does not apply to non-merchant sale of goods. (3) CISG, UNIDROIT adopt the “fundamental breach” rule. (4) Installment sale is subject to lesser standard.

Question 16

Substantial Impairment Rule for UCC Installment Contracts

Answer 16

Buyer may reject a nonconforming installment that substantially impairs that installment and can’t be cured. A breach is basis to reject whole contract (all installments) only if it substantially impairs value of the whole contract.

Question 17

Partial Breach

Answer 17

No effect on injured party’s duties, but that injured party may sue for any damages it can prove.

Question 18

Material Breach

Answer 18

Injured party’s duty suspended; cease performance pending cure. Don’t fire breaching party or hire substitute. Cooperate.

Question 19

Total Breach

Answer 19

Injured party is discharged and can terminate (“fire”) breaching party, and hire substitute to finish work.

Question 20

Extrinsic Evidence

Answer 20

Evidence of any fact other than the disputed words or other words in the integration within which the disputed words are located.

Question 21

After hearing extrinsic evidence, both meanings are plausible. What does the judge do?

Answer 21

Find against the party bearing the burden of proof. Find no mutual assent and no contract, especially if its possible to grant restitution. Choose the “best” of the two meanings. (Any of the above)

Question 22

Implied Duty of Good Faith

Answer 22

Neither party should take actions that would constitute unreasonably surprising destruction of the other party’s purpose in making the contract.

Question 23

Express Warranty

Answer 23

Expressed affirmation of fact.

Question 24

Implied Warranty of Fitness

Answer 24

Specific representations for a specific purpose. Buyer relied on it.

Question 25

Ambiguous Words

Answer 25

Words have two entirely different meanings.

Question 26

Vague Words

Answer 26

Imprecise words having either broad (inclusive of an idea) or a narrow (exclusive of an idea) scope.

Question 27

Parol Evidence Rule

Answer 27

Alleged term (a rule) omitted from integration is rejected, subject to one of several exceptions.

Question 28

Interpretation

Answer 28

A term is part of contract (including omitted term surviving integration) but parties dispute the meaning of words of term.

Question 29

Evidence

Answer 29

(useful facts) might be in “4 corners” of contract (other words in a contract) or “extrinsic” (parol).

Question 30

Esjudem Generis

Answer 30

If general words follow an enumeration of specific things, the general words are not to be construed in their widest extent, but apply only to things of the same kind as those enumerated.

Question 31

Expressio Unius Est Exclusio Alterius: Implied Exclusion

Answer 31

Stating one thing might imply the exclusion of another.

Question 32

Extrinsic Evidence that Might Interpret a Term

Answer 32

(1) The parties testimony about what they really meant (2) Things said and done during negotiations. (3) Proof a “special language” between the parties or in their trade. (4) Circumstances of the parties, industry, or market.

Question 33

Ways to Make Meaning of Text Clear Without Extrinsic Evidence: Tools for Interpretation Within the Four Corners (8)

Answer 33

1. Words uncertain in isolation might be clear in the context of other provisions within the same text. 2. Read text in light of a stated purpose 3. Correct obvious error’s of grammar. spelling a punctuation. 4. Handwritten words over take precedence over typed words. 5. Avoid an interpretation that would render the contract illegal or in violation of public policy. 6. Avoid an interpretation that would lead to conflict between provisions of the contract. 7. Avoid an interpretation that leads to an unreasonable outcome or effect. 8. Prefer interpretation giving meaning and effect of all words of the text.

Question 34

Omitted Implied Terms That Fill Gaps In A Contract (4)

Answer 34

1. Other terms or circumstances imply the “unexpressed” term. 2. Customary practice of parties or of their community or trade. (3) Reasonableness or good faith requires rule parties would’ve adopted had they discussed it. 4. Public Policy demands implied term (e.g., implied warranty).