Contract Law-excuses to performance

Question 1

What is the rationale behind excuses to performance?

Answer 1

There is a K but something happend that prevent one side from having to perform.

Question 2

What are the instances that excuse performance of a contract?

Answer 2

Imposibility and impracticability
Death after the contract
Frustration of purpose
Modification or cancellation of first K
Accord and Satisfaction
Novation

Question 3

What it is required to prove Imposibility and impracticability?

Answer 3

Look for these common fact patterns:
 Performance becomes illegal after the contract is formed;
 The subject matter of the contract is destroyed; or
 In a services contract with a “special person,” the performing party dies or is incapacitated.

REMEMBER, something that just makes performance more expensive than expected will not normally excuse performance.
o Look for something that hinders the ability to perform, not just the cost to perform.

Look for an unforeseen event in which the non-occurrence of the event was a basic
assumption of the contract, and the party seeking discharge was not at fault.

Question 4

Is death usually an excuse to perform?

Answer 4

o Dying does not normally excuse liability on a contract that has been made.
 The estate will normally be on the hook for any contractual obligations.

Test: Ask whether there is something special about the person performing on the contract, such that it makes no sense to continue if they die.

Question 5

Explain frustration of purpose as an excuse for performance

Answer 5

Performance can still occur, but something has happened to undermine the entire reason for the creation of the contract.

o This is very rare—the event must be extreme and not previously allocated to one of the parties.

Question 6

Can both parties agree to just walk away from a contract?

Answer 6

Yes, as long as there is some performance remaining from each side.
 Otherwise, there is no consideration for this modification.

This is called rescission (or cancellation) by mutual agreement

Question 7

What is Accord and Satisfaction and its consequences?

Answer 7

• The parties to an earlier contract agree that performance will be satisfied instead by completing a different performance.
  o The new performance is called the accord.
  o The excusal of the initial performance obligation is called the satisfaction.

If the accord is not performed, the other side can sue on either the original obligation or the new promise.

Question 8

What is the difference between accord and satisfaction and a modification?

Answer 8

If the party to perform has the option to satisfy a contract obligation by doing something else, then it is an accord and satisfaction.
o In a modification, it is clearer that the parties have changed the performance obligation

Question 9

What is a novation?

Answer 9

• Arises when BOTH parties agree that a substitute person will take over the contractual obligations.
• If there is a valid novation, then the original promisor will be excused from performance.

Question 10

o Can one side decide to create a novation by asking someone else to do the work?

Answer 10

no, this is called a “delegation,”