Conditions and Promises Flashcards
What is the effect of a promise/covenant?
A right under a contract. A benefit of the obligor’s promise.
How does common law treat “best efforts”?
Common law does not apply a best efforts term to contractual obligations
Contracts are a form of . . .
strict liability
What are used to soften the spikes of strict liability nature of contracts?
conditions
What is the difference between defenses and excuses?
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.
What is a condition precedent?
A condition precedent is a fact or event which the parties intend must exist or take place before there is a right to performance.
If a condition precedent is not fulfilled, the contract . . .
is not enforceable
What is the test for a condition precedent?
Lack of ambiguity. If a condition is not ambiguous, it must be complied with.
What is an express condition precedent?
One that is agreed to and imposed by the parties themselves.
What is an implied or constructive condition precedent?
Those imposed by law to do justice
How much of a condition precedent must be performed?
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.
What are the elements of substantial performance?
- The party made an honest endeavor in good faith to perform its part of the contract;
- The results of the endeavor are beneficial to the other party
- Such benefits are retained by the other party
When the doctrine of substantial performance applies, what kind of damages are available?
expectation damages
In determining whether something is a condition or covenant, what effect does ambiguity have?
There is a presumption that they are covenants, not conditions
What are the two ways in which conditions are classified?
- By time
- By how the condition arises
What is the time classification of conditions?
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
What is a condition precedent?
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.
What is a condition subsequent?
Any event that discharges a duty of performance that has arisen.
What are concurrent conditions?
The parties agree to exchange performances at the same time.
What is the burden of proof for a condition precedent?
The party who is seeking to enforce the promise has the burden of proof to establish that the condition occurred.
What are the two theories for burden of proof of a condition subsequent?
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.
What are the three classifications by how the condition arises?
- Express
- implied in fact
- constructive (implied in law)
How is an express condition created?
By the agreement of the parties
How is a condition implied in fact created?
They are not present in words but are gathered from the terms of the contract as a matter of interpretation
How are constructive conditions created?
supplied by a court if reasonable under the circumstances
In what situation does a constructive condition arise?
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.
In what particular aspect does constructive condition differ from express or implied in fact?
They are generally more flexible. For example, substantial performance may be sufficient.
