Contracts 4: Defenses

Question 1

§261 Discharge by superseding impracticability

Answer 1

After a contract is made (post contract formation)

1) party without fault by occurrence of event
2) non-occurrence of (some bad event) was a basic assumption (§262-264)

UNLESS language to contrary

THEN duty to perform discharged

Question 2

§262 Death or incapacity of person necessary for performance

Answer 2

If death/incapacity makes performance impracticable is non-occurrence of basic assumption

THEN satisfied element of §261

Question 3

§263 Destruction, Deterioration or failure to come into existence of thing necessary for performance

Answer 3

If existence of particular thing needed to preform (bad event) that makes performance impracticable is of non-occurrence of basic assumption

THEN satisfied element of §261

Question 4

§264 Prevention by governmental regulation or order

Answer 4

If performance of duty is made impracticable by complying with domestic or foreign government; that regulation order is a non-occurrence that was basic assumption

THEN satisfied element of §261

Question 5

§265 Discharge by Supervening Frustration

Answer 5

§265 Discharge by Supervening Frustration

After written contract is made

Party’s principal purpose is substantially frustrated without his fault

The non-occurrence (of bad event) that was a basic assumption

UNLESS language to the contrary

THEN duty is discharged

Question 6

§344 Purpose of remedies (3 ways)

Answer 6

A) expectation interest (post contract

Benefit of bargain put in position as good if contract was performed

B) Reliance interest (pre contract)

Reimbursed for loss caused by reliance if contract has not been made

C) restitution interest (pre contract)

Restore any benefit that he has conferred on the other party

Question 7

§347 Measurement of expectation damages (statement and formula

Answer 7

Subject to limitations in §350-53, injured party has damages expectation interest: A+B-C= damages

A) the loss in value to him of the other party’s performance caused by its failure or deficiency PLUS (expected value- actual value)

B) any other loss, including incidental or consequential loss caused by the breach, LESS

C) any cost or other loss that he has avoided by not having to perform (Expected cost – actual cost)+ avoid other loss

Question 8

Crabby case difference vs restatement for calculating damages

Answer 8

Crabby can overcompensate

-does not factor in cost/loss avoided