Contracts Flashcards
Condition
event that is uncertain to occur but must occur, unless nonoccurrence is excused, before performance under the contract becomes due. (R 224)
If a contract is ambiguous…
courts prefer to impose a duty rather than a condition. (R 227)
Why do courts prefer to impose a duty?
reduce obligee’s risk of forfeiture, courts prefer deal go through
Once the condition has occurred…
the obligor’s performance is due (R 225)
2 Types of Conditions
Express and Constructive (Implied)
Express Conditions
strictly enforced conditions agreed upon by both parties (Luttinger)
When does a breach excuse the other party’s performance?
A party’s breach excuses the other party’s performance if the non-breaching party’s obligations were dependent on the breaching party’s obligations.
If a condition is precisely described…
it has to be met for the contract to be enforceable
Time is of the essence
Specific date of performance does not necessarily mean that performance by that date is “of the essence” to the contract (R 242; Internatio)
When can express conditions be waived?
after being repeatedly and constantly disregarded (McKenna)
Satisfaction as a Condition
If satisfaction is a condition that must be met before the other party has to perform,, a reasonable person’s opinion of satisfaction (if practicable) satisfied the condition. (R 228, Gibson)
Unqualified approval is a…
condition precedent to purchaser’s obligation to pay
Duty of Good Faith and Fair Dealing
R 205–making decisions regarding satisfaction in good faith is a constructive condition; it is a breach if you say something is unsatisfactory in bad faith
If nonoccurrence of a condition causes disproportionate forfeiture…
a court may excuse the nonoccurrence, unless its occurrence is material to the contract (R 229)
Framing Questions for Conditions: (Internatio)
- What was the condition?
- What was the obligation if the condition occurred?
- Who was the condition to benefit?
- Who had the risk of the condition not occurring?
- Who controls whether or not the condition occurs?
- Was the condition also a duty?
Mitigating Doctrines of Express AND Constructive Conditions
- Prevention
- Waiver, Estoppel, and Election
- Interpretation and the Avoidance of Forfeiture
Nonoccurrence of a Condition
Where a party’s breach by nonperformance contributes materially to the nonoccurrence of a condition of one of her duties, the nonoccurrence is excused
Who does nonoccurrence have a very large forfeiture on?
The obligee
When is a duty due?
when the condition has occurred, or the nonoccurrence of a condition is excused
When is a duty discharged?
Nonoccurrence of a condition
Constructive Conditions
the making of contractual obligations into conditions due to the court’s interpretation of what the parties intended, imposed by the law to do justice
If one performance takes time…
it must be fully performed before the obligor’s performance becomes due, unless otherwise specified in the contract (R 234(2))
If a contract does not dictate when payments shall occur…
it is implied that the work must be substantially performed before payment becomes due (Stewart)