Conditions

Question 1

Condition vs Promise

Answer 1

A condition is a future event, the happening of which triggers a duty of a party to perform on a contract.

A promise is a duty to perform on a contract.

Failure of a condition relieves a party from their duty to perform.

Failure of a promise constitutes a breach. The non-breaching party is entitled to damages, but is not excused from performing.

Question 2

Express vs Implied Conditions

Answer 2

Express conditions are conditions expressed in the contract; typically evidenced by language such as, “on the condition that” or “provided that”, etc.

Express conditions must be complied with fully unless excused; substantial performance is insufficient.

Implied (or constructive) conditions are those that are deemed to be part of the contract because

• the nature of the agreement suggests that the parties truly intended the condition but failed to expressly include it,
• or because fairness requires including the condition to prevent an unjust result.

Question 3

Constructive Conditions of Exchange

Answer 3

• most common constructive condition
• construction/employment
• builder/employee performs first
• duty of good faith and fair dealing
• substantial performance works

Question 4

Perfect Tender

Answer 4

Under the UCC, the basic obligations of a seller are to transfer ownership of the goods to the buyer and to tender goods conforming to the warranty obligations.

The UCC requires perfect tender, substantial performance will not suffice except for installment contracts or when the parties agree that it applies.

Transfer of ownership:

• good title
• rightful transfer
• free of security interest

Question 5

Suspension/Excuse of Conditions

Answer 5

• Waiver (express or implied)
• Wrongful Interference (bad faith)
• Election (choose to continue)
• Estoppel (detrimental reliance)