Conditions and Promises

Question 1

What is the effect of a promise/covenant?

Answer 1

A right under a contract. A benefit of the obligor’s promise.

Question 2

How does common law treat “best efforts”?

Answer 2

Common law does not apply a best efforts term to contractual obligations

Question 3

Contracts are a form of . . .

Answer 3

strict liability

Question 4

What are used to soften the spikes of strict liability nature of contracts?

Answer 4

conditions

Question 5

What is the difference between defenses and excuses?

Answer 5

Defense to formation argues a contract was not formed. Excuse to performance argues that a contract was formed but a party has not fulfilled its duties.

Question 6

What is a condition precedent?

Answer 6

A condition precedent is a fact or event which the parties intend must exist or take place before there is a right to performance.

Question 7

If a condition precedent is not fulfilled, the contract . . .

Answer 7

is not enforceable

Question 8

What is the test for a condition precedent?

Answer 8

Lack of ambiguity. If a condition is not ambiguous, it must be complied with.

Question 9

What is an express condition precedent?

Answer 9

One that is agreed to and imposed by the parties themselves.

Question 10

What is an implied or constructive condition precedent?

Answer 10

Those imposed by law to do justice

Question 11

How much of a condition precedent must be performed?

Answer 11

Express conditions must be literally and fully performed, whereas constructive conditions, which ordinarily arise from language of the promise, are subject to the precept that substantial compliance is sufficient.

Question 12

What are the elements of substantial performance?

Answer 12

1. The party made an honest endeavor in good faith to perform its part of the contract;
2. The results of the endeavor are beneficial to the other party
3. Such benefits are retained by the other party

Question 13

When the doctrine of substantial performance applies, what kind of damages are available?

Answer 13

expectation damages

Question 14

In determining whether something is a condition or covenant, what effect does ambiguity have?

Answer 14

There is a presumption that they are covenants, not conditions

Question 15

What are the two ways in which conditions are classified?

Answer 15

1. By time
2. By how the condition arises

Question 16

What is the time classification of conditions?

Answer 16

When the time of the conditioning event is to happen in relation to when a a moment when a duty to perform a particular promise arises

Question 17

What is a condition precedent?

Answer 17

A pre-requisite to the parties’ performance obligations. If the condition does not occur and is not excused, the promised performance need not be rendered.

Example: Rob has promised to pay Melissa $200 if a package arrives before Tuesday.

Question 18

What is a condition subsequent?

Answer 18

Any event that discharges a duty of performance that has arisen.

Question 19

What are concurrent conditions?

Answer 19

The parties agree to exchange performances at the same time.

Question 20

What is the burden of proof for a condition precedent?

Answer 20

The party who is seeking to enforce the promise has the burden of proof to establish that the condition occurred.

Question 21

What are the two theories for burden of proof of a condition subsequent?

Answer 21

1: All conditions are equal. Burden rests on party seeking to enforce the promise.
2: Conditions subsequent are a defense to liability, thus the burden rests on the person seeking to excuse nonperformance.

Question 22

What are the three classifications by how the condition arises?

Answer 22

1. Express
2. implied in fact
3. constructive (implied in law)

Question 23

How is an express condition created?

Answer 23

By the agreement of the parties

Question 24

How is a condition implied in fact created?

Answer 24

They are not present in words but are gathered from the terms of the contract as a matter of interpretation

Question 25

How are constructive conditions created?

Answer 25

supplied by a court if reasonable under the circumstances

Question 26

In what situation does a constructive condition arise?

Answer 26

When the parties have omitted an essential term and the court then supplies one. If that terms makes an event a condition, it is a constructive condition.

Question 27

In what particular aspect does constructive condition differ from express or implied in fact?

Answer 27

They are generally more flexible. For example, substantial performance may be sufficient.