Cure & Repudiation Flashcards
Repudiation
- is a statement by the obligor promisor to the obligee Promisee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under $243 or in other words the party says that they are not going to perform in the contract like they were suppose to
- a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach
How to tell if you are in breach or substantial performance
USE BRAGS TO DETERMINE
first step
Are we material or substantial performance if so give the party a chance to cure then if cure fails move to total breach or partial breach
Repudiation
- where a party repudiates before its committed a breach by non performance and before it has received all of the benefits agreed to be received in exchange for it, repudiation alone gives rise to a claim for damages under total breach (anticipatory breach)
- where performance are to be exchanged under a bilateral contract, one partys repudiation of a duty render performance discharges the other party remaining duties to render performance.
Do we have repudiation?
If a party to a contract has reasonable grounds to believe that the other party will commit a breach by non performance that would of itself give rise to a claim for total breach , he or she may demand adequate assurance
Reasonable assurances/cures
A party demanding reasonable assurances may treat as repudiation the other party failure to provide within a reasonable time such assurance of due performance as is adequate in the circumstances of a particular case. Example: Smargon = TOTAL BREACH
** Daniel Smargon and Audrey Viterbi (the Smargons) (plaintiffs) vs. Grand Lodge Partners, LLC (GLP) (defendant)
The Smargons contracted with GLP to purchase a new resort condominium unit.
They expressed concern about potential noise from a nearby mechanical room affecting the unit.
Despite GLP’s promise to address the issue, the Smargons’ preclosing walk-through inspection was disrupted by noise and vibration from the mechanical room.
GLP sent the Smargons letters with vague references to noise correction measures, downplaying the issue, and imposing a deadline for closing the sale.
The Smargons rejected the deadline and sued GLP for breach of contract.
Issue: The central legal question in this case.
Holding and Reasoning:
The court ruled in favor of the Smargons.
GLP’s actions breached the contract.
The trial court ordered restitution of the Smargons’ down payment.
Rule of Law: The legal principle on which the court based its decision.
For more detailed information, you can refer to the full case brief provided by Quimbee, a trusted resource for law students1.
Remember, this case highlights the importance of clear communication and good faith dealings in contractual relationships.
How to find out if performance is suspended or discharged?
A party’s uncured material failure to perform or to offer to perform not only has the effect of suspending the other party’s duties but, when it is too late for the performance or the offer to perform to occur, the failure also has the effect of discharging those duties. Ordinarily, there is some period of time between suspension and discharge, and during this period a party may cure his failure.
Reasonable and assurance/ cure
The relevant factors to be considered in assessing the adequacy of assurances include the relationship between the parties , any prior dealings they may have had, the reputation of the party whose performance has been called into question, the nature of the grounds for insecurity, and the time within which the assurance must be finished, Smargon citing 2d § 251
Performance suspended or discharged ?
In determining the time left which a party’s uncured offer performance discharges the other party’s remaining duties to render performance,, the following circumstances are significant:
1. those stated in § 241 material breach v substantial performance standards…
2. the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements
3. the extent to which the agreement provides for performance without delay, but a material failure to perform or to offer to perform on a stated day does not of itself discharge the other party’s remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is important.
