Contractual Obligations

Question 1

What is substantial performance?

Answer 1

An equitable doctrine that, when it applies, requires obligations of the contract be performed, i.e. payment, as party performed but did so imperfectly

Question 2

Material breach defined

Answer 2

Not all breaches are equal. A material breach is a breach that goes to the essence of the contract. It is so fundamental that not only is the party entitled to damages, but they may stop performance in its entirety

Question 3

— — is anathema to material breach

Answer 3

Substantial performance

If a party substantially performed, there cannot have been a material breach

Question 4

Elements of substantial performance

Answer 4

1) party made honest effort in good faith to perform
2) results beneficial to other party
3) benefit retained by other party

Question 5

While — — alone will not avoid material breach, a lack of — — will kill a claim of substantial performance

Answer 5

Good faith

Question 6

Occurrence is required for a contract to remain enforceable

Answer 6

Condition

Question 7

Two ways to classify conditions

Answer 7

1) when the event is to happen in relation to duty to perform
2) how the condition arises-by agreement or by law

Question 8

Two types of conditions based on the temporal aspect

Answer 8

1) condition precedent
2) condition subsequent

Question 9

Act or event must exist before a duty to perform a promise arises

Answer 9

Condition precedent

Question 10

In a condition precedent, if the condition does not occur . . .

Answer 10

Performance need not be rendered

Question 11

Event that discharges a duty of performance that has arisen

Answer 11

Condition subsequent

Question 12

Who has the burden of proof whereas conditions are concerned

Answer 12

The party seeking enforcement has burden of proof to show condition occurred

Question 13

Two views on the burden of proof for a condition subsequent

Answer 13

1) party seeking to enforce has burden
2) as it is a defense, defendant has burden

Question 14

What are the 3 ways in which a condition can arise

Answer 14

1) express within the agreement
2) implied in fact
3) implied in law

Question 15

Factors of material breach

Answer 15

1) extent to which injured party will be deprived of expected benefit
2) extent to which injured can be adequately compensated
3) extent of forfeiture of failing party
4) likelihood failure will be cured (reasonable assurances)
5) extent to which standards of good faith and fair dealing are adhered to

Question 16

What is the effect of a repudiation on breach

Answer 16

A repudiation transforms what would otherwise be a minor breach into a material one

Question 17

True or False: the contract itself may detail the time, manner, or other details, and if it does an otherwise minor breach can become material

Answer 17

True

Question 18

What is the counterpart of material breach in the UCC?

Answer 18

In a sale of goods, the standard is the perfect tender rule

Question 19

What is election of remedies?

Answer 19

When there is a material breach, a party can seek damages but continue performance, seek damages and termination of the contract, but they cannot do both

Question 20

When must a buyer accept an installment delivery of non-conforming goods?

Answer 20

If it is curable and seller gives adequate assurance of cure

Question 21

What constitutes an adequate assurance?

Answer 21

Letter of credit, payment of outstanding and future invoices, using an alternative supplier

Question 22

What is the effect of a divisible contract?

Answer 22

If a contract can be divided, party who has performed one part is entitled to compensation for that part even if they breached another

Question 23

When is a contract divisible?

Answer 23

If it is possible to apportion parties performances into matching or corresponding parts treated as equivalents