Conditions

Question 1

What are conditions in a contract?

Answer 1

an uncertain event that must occur before a party can be required to perform

Question 2

what are the two types of conditions?

Answer 2

1. Express conditions - a condition that the parties explicitly agree
2. constructive conditions - a condition implied by law to avoid injustice

Question 3

What are some excuses for nonoccurence?

Answer 3

1. Waiver
2. Estoppel
3. Disproportionate forfeiture

Question 4

Under an estoppel excuse to nonoccurrence of a condition, when must a party perform?

Answer 4

1. The obligor promised to perform despite the nonoccurence
2. The obligee changed their position in reasonable, foreseeable and detrimental reliance on the promise
3. Enforcing the promise would unfairly harm the obligee

Question 5

How does an obligor waive a condition?

Answer 5

1. Making an express statement to waive the condition
2. Accepting performance despite the nonoccurrence

EXCEPT if the condition is a material part of the contract

Question 6

Describe the rule of disproportionate forfeiture in relation to nonoccurence of a condition

Answer 6

an obligor must perform despite the nonoccurrence of a condition if

1. the condition is not a material part of the contract
2. The obligee has substantially relied on the expectation of the parties’ exchange
3. the obligee’s loss if the condition is enforced is much greater than the obligor’s loss if the nonoccurrence is excused