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Contracts > Did either party fail to perform its part of the deal, and if so, was that non-performance excused? > Flashcards

Did either party fail to perform its part of the deal, and if so, was that non-performance excused? Flashcards

1
Q

Condition precedent

A

Required performance = non-occurrence of which terminates other party’s performance, occurrence of which triggers other party’s performance
(uncertain event which must occur before one party’s performance is due)

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2
Q

How do you satisfy express conditions precedent?

A

Strict compliance

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3
Q

How do you satisfy constructive conditions precedent?

A

Substantial performance

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4
Q

Express condition precedent

A

Parties agree

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5
Q

How do you satisfy an express condition of obligee’s satisfaction?

A
  1. Services that do not require personal taste = whether reasonable person would be satisfied (objective)
  2. Services that do require personal taste = whether obligee in good faith would be satisfied (subjective)
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6
Q

How do you satisfy an express condition of 3P’s satisfaction?

A

Whether 3P in good faith would be satisfied (objective)

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7
Q

Constructive condition precedent

A

Court applies based upon what is reasonable under circumstances

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8
Q

In interpretating, what do courts give greater weight to?

A
  1. Specific terms over general terms

2. Negotiated or added terms over standard terms

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9
Q

How do courts construe: against or for drafting party?

A

Against drafting party

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10
Q

How would a court construe terms like

  • “if”
  • “provided that”
  • “on condition that”
  • “subject to”?
A

As evidence of condition

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11
Q

What are some terms that could be evidence of an express condition?

A

“If”
“Provided that”
“On condition that”
“Subject to”

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12
Q

If performances can be due simultaneously, how does a court prefer to construe them?

A

To be due simultaneously

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13
Q

If one performance is expressly due at a specific time and other performance has no express deadline, when would court likely construe performance to be due? (At the same time, specific deadline first, no deadline first)

A

The performance with the express deadline is due prior to performance without express deadline.

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14
Q

What are the excuses for non-occurrence?

A
  1. Acceptance of performance despite non-occurrence
  2. Other party is bad faith cause of breach
  3. Impracticality/impossibility
  4. Disproportionate forfeiture
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15
Q

What is required for impracticality or disproportionate forfeiture to excuse non-occurrence?

A

Non-occurring condition must not have been a material term

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16
Q

If breach is not material, who can sue on the contract?

A

Either party

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17
Q

If breach is material, who can sue on the contract?

A

Non-breaching party

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18
Q

If breach is material, how can non-breaching party sue?

A

Limited to a remedy in quasi-contract with damages measured by excess of benefits conferred over/above harm caused

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19
Q

If breach is material, how can breaching party sue?

A

On the contract with any defects in performance recompensed by a setoff for the damages caused

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20
Q

Factors in determining whether failure to render performance is material

A
  1. extent to which injured party will be deprived of benefit which he reasonably expected
  2. extent to which the party failing to perform or to offer to perform will suffer forfeiture
  3. likelihood that the party failing to perform or to offer will cure his failure, taking account of all the circumstances including any reasonable assurances and
  4. extent to which the behavior of party failing to perform or to offer to perform comports with standards of good faith and fair dealing
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21
Q

Generally, when is a delay in performance material?

A

Only if time is of the essence (it operates to significantly deprive the other party of the benefit of the contract)

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22
Q

When is time is of the essence?

A

It operates to significantly deprive the other party of the benefit of the contract

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23
Q

In determining whether time is of the essence, what is the presumption?

A

Time is not of the essence, unless made apparent by contract or conduct

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24
Q

UCC perfect tender rule

A

Close performance is not good enough = buyer has right to reject any imperfect tender

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25
Q

Buyer’s right under UCC perfect tender rule

A

right to reject any imperfect tender

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26
Q

Under the UCC Perfect Tender Rule, when does the seller have an opportunity to cure and how long for each?

A
  1. Reasonable grounds to believe imperfect delivery would be allowable (ex. by past conduct) = seller gets reasonable time to cure
  2. Still time left for delivery = seller gets rest of contracted-for date to cure
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27
Q

Under UCC Perfect Tender Rule, what options does a buyer have for an imperfect delivery of goods?

A
  1. Reject the whole
  2. Accept the whole
  3. Accept any commercial unit or units and reject the rest
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28
Q

Under UCC Perfect Tender Rule, once goods are accepted, may the buyer reject the goods?

A

No

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29
Q

When does acceptance of goods occur?

A
  1. After reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity or
  2. Fails to make an effective rejection after buyer has had reasonable opportunity to inspect them or
  3. Does any act inconsistent with the seller’s ownership
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30
Q

When may a buyer revoke his acceptance?

A
  1. If non-conformity substantially impairs its value to him and
  2. He accepted it on reasonable assumption that its non-conformity would be cured and it hasn’t been seasonably cured or
  3. Without discovery of such non-conformity if his acceptance was reasonably induced either
    a. by the difficulty of discovery before acceptance or
    b. by seller’s assurance
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31
Q

Installment contract

A

One which requires or authorizes the delivery of goods in separate lots to be separately accepted

32
Q

What can a buyer do if installment is nonconforming?

A

Reject nonconforming installment if

  1. nonconformity substantially impairs value of that installment and
  2. cannot be cured
33
Q

What happens if nonconformity or default substantially impairs the value of the whole contract?

A

Breach of whole contract

34
Q

Does the UCC presume single-delivery or installment contracts?

A

Single-delivery

35
Q

When one party unambiguously declares to the other party that it will not perform prior to date of performance, what choices does a non-breaching party have under common law?

A

Non-breaching party’s performance is excused and may either

  1. await performance by repudiating party for commercially reasonably time or
  2. immediately sue for breach
36
Q

When can a repudiating party retract their repudiation?

A

Before the other party materially alters position in reasonable reliance upon the repudiation

37
Q

What is the effect of a retraction of repudiation?

A

Obligations of both parties are revived

38
Q

Under UCC, if a party has reasonable grounds for insecurity, what can the party do?

A

Demand in writing adequate assurance of future performance and suspend performance until such assurance is received within a reasonable time no more than 20 days

39
Q

What does failure to provide such reasonable assurance constitute? What is the deadline?

A

Constitutes anticipatory breach if assurance is not received within a reasonable time no more than 20 days

40
Q

Between merchants, what determines reasonable grounds for insecurity?

A

Determined according to commercial standards

41
Q

Does acceptance of any improper delivery/payment prejudice aggrieved party’s right to demand adequate assurance?

42
Q

If aggrieved party notified repudiating party that he would await latter’s performance and urged retracting of repudiation, what action can he take?

A
  1. Await performance for commercially reasonable time or
  2. Resort to any remedy for breach
    AND
  3. Suspend performance (either way)
43
Q

What are excuses for nonperformance?

A
  1. Breach

2. Failure of conditions (precedent or subsequent)

44
Q

If a breach is material, is the non-breaching party’s duty discharged?

45
Q

Material breach

A

undermines substantial benefit of bargain

46
Q

Minor (immaterial) breach

A

slight deviation from the promised performance

47
Q

If a breach immaterial (minor), is the non-breaching party’s duty discharged?

A

No, but can sue for damages caused by breach

48
Q

When is performance due (in contract with conditions)?

A

Performance is due when there are no conditions or all conditions are satisfied/executed

49
Q

Which is type (time) of condition is the default?

A

Condition concurrent

50
Q

When are conditions concurrent due?

A

simultaneously

51
Q

How does condition precedent affect the other party’s performance?

52
Q

How does condition subsequent affect the other party’s performance?

A

Terminates

53
Q

Examples of conditions subsequent

A

Until

So long as

54
Q

Examples of conditions precedent

A

On the condition that
As long as
If

55
Q

What are the two types of condition (based on source)?

A
  1. Express

2. Implied/constructive

56
Q

Excusing conditions (when is nonperformance excused)

A
  1. Hindrance/failure to cooperate in good faith
  2. Substantial performance (in implied/constructive conditions)
  3. Equitable doctrines of waiver or estoppel
  4. Impossibility, impracticability, frustration of purpose
57
Q

Equitable doctrine of estoppel

A

protected by a condition before event was to occur and other party relies (statement made by a person)

58
Q

Equitable doctrine of waiver

A

protected by condition made after even already failed to occur

59
Q

Discharging conditions (when is duty discharged)

A
  1. Tender of, or actual, performance
  2. Condition subsequent
  3. Unforeseen post-formation changes of position
  4. Impossibility, impracticality, frustration of purpose
  5. Later agreement
60
Q

Impossibility

A

Objective = nobody could do it

61
Q

Impracticality

A

Subjective = doing it would be unduly burdensome

62
Q

Later agreements that discharge duty

A
  1. Rescission
  2. Modification
  3. Novation
  4. Accord & satisfaction
  5. Statute of limitations
63
Q

Rescission

A

Mutual promises to end

64
Q

What is required for rescission to be enforceable?

A

Some obligation is still remaining

65
Q

What is required for modification to be valid?

A

New consideration (common law) or good faith (UCC)

66
Q

Novation

A

Mutual agreement of both original contracting parties to substitute one of original contracting parties for A STRANGER

67
Q

Accord

A

agreement by parties to accept different performance in satisfaction of existing obligation

68
Q

Satisfaction

A

performance of accord

69
Q

What triggers the statute of limitations (when does it begin to run)?

A

Breach, NOT FORMATION

70
Q

When contract itself allocates risk of loss, who bears risk of loss?

A

Whichever party designated by contract

71
Q

What factors affect risk of loss?

A
  1. Contract
  2. Breach unrelated to this contract/breach
  3. Shipment vs. destination contract
  4. Merchant vs. non-merchant seller
72
Q

Who bears risk of loss in shipment contract?

73
Q

Who bears risk of loss in destination contract?

74
Q

With a merchant seller, who bears risk of loss?

A

Buyer upon receipt

75
Q

With a non-merchant seller, who bears risk of loss?

A

Buyer upon tender

Contracts (7 decks)

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