Contracts > VI. Things Happening After Contract That Excuse Performance Flashcards
Contracts > VI. Things Happening After Contract that Excuse Performance
When does a demand for adequate assurances arise?
In a sale of goods contract, if the words or conduct of one party gives “reasonable grounds for insecurity,” then the other party can, in writing, demand adequate assurance and if it is “commercially reasonable,” can suspend performance until it gets adequate assurance.
Contracts > VI. Things Happening After Contract that Excuse Performance
When faced with an expression of doubt from another party as to whether or not they will perform in a sale of goods contract, what can a party do and what should the party NOT do?
When faced with an expression of doubt from the other party (“reasonable grounds for insecurity”), a party has 2 options: (1) wait and see if he shows up at the date of performance or (2) make a demand for adequate assurances. The party should not sue the other party. If you file a suit based on just an expression of doubt, you’ll be liable for breach.
Contracts > VI. Things Happening After Contract that Excuse Performance
When does anticipatory repudiation arise?
Anticipatory Repudiation arises when there’s an unambiguous statement by one party of an intent not to perform. Anticipatory repudiation by one party excuses the other party’s duty to perform. It generally gives rise to an immediate claim for damages for breach unless the claimant has already finished her performance
Contracts > VI. Things Happening After Contract that Excuse Performance
When does anticipatory repudiation NOT give the nonbreaching party the right to sue immediately?
When the party unambiguously indicates it will breach after the other party has fully completed performance. In that case the nonbreaching party must wait to recover damages for breach of contract until the contract date for payment.
Contracts > VI. Things Happening After Contract that Excuse Performance
What is the rare but most likely situation that will excuse performance/delivery of goods.
Objective impossibility (act of God). When nobody at any time can perform the K.
