Discharge Flashcards
When is the duty to perform is discharged?
Duty is discharged under
-> impracticability
-> frustration of purpose
-> rescission
-> release
-> destruction or injury to identified goods
What CL doctrine does impracticability replace?
When is the defense to impracticability available?
What are the elements of the impracticability defense?
Replaces CL doctrine of impossibility
Defense available IF
-> performance comes to be illegal after K is made
-> specific subject matter of K is destroyed
-> performing party to the K dies or becomes incapacitated (personal services K)
OR
-> perfjoamcne becomes impracticable
Elements:
-> unforeseeable event has occurred
-> non-occurrence of event was basically assumption on which K was made;
AND
-> party seeking discharge is not at fault
When does the fact leading to K being impracticable arise? Can the fact exist prior to the formation of K?
Does the assumption of risk negate the availability of an impracticability defense?
Timing
-> usually arises after K formation, but a fact making K performance impractical can exist when K is made IF the party has no reason to know of the fact
Assumption of risk
-> impracticability defense not available to a party who assumes the risk of an event happening
What is partial impracticability do to someone’s duty?
Can a partial impracticability discharge performance of a party’s duty completely?
Temporary impracticability ONLY suspends duty.
Duty is discharged if performance is materially more burdensome after impracticability ends.
What happens when impracticability does not prevents a seller from delivering all of the goods?
If seller is able to deliver some of the goods, they must be apportioned among all of the buyers with whom the seller has contracted.
Buyer may refuse to accept and may cancel K
What does failure of a particular source mean under impracticability?
If K specifically identifies a source, AND source of supply fails, THEN performance is discharged EVEN IF other sources are available
How does frustration of purpose work?
What is frustrated party able to do?
Must the unexpected event be unforeseeable?
Can the fact exist prior to the formation of K?
Applies when unexpected events arise that destroy one party’s purpose in entering into K, EVEN IF performance of K not rendered impossible.
Frustrated party entitled to rescind K without paying damages
Unexpected event need not be completely unforeseeable, but must be so severe it’s not within assumed risks inherent under K.
Timing - can arise at the time of K if a party has not reason to know a fact exists
What is rescission?
Is consideration needed to rescind a K?
Can you still rescind a K if third party rights have already vested?
Cancelling (aka rescission) of K by mutual agreement so as to restore parties to their positions before K was made.
The surrender of rights under the original contract by each party is consideration for the rescission by mutual agreement.
In cases of third-party beneficiaries, a contract cannot be rescinded by mutual agreement if the rights of the third-party beneficiary have already vested.
How does a release work, what is required of it?
How does release work under CL versus UCC?
Writing that manifests intent to discharge another party from an existing duty
CL - release must be supported by consideration
UCC - written wavier or renunciation signed/delivered by aggrieved party is enough (no consideration necessary)
What happens when there is destruction of identified goods due to no fault of either party before risk of loss passes to the buyer?
What happens if goods are damaged but not destroyed?
What happens if risk of loss has passed to the buyer?
Destruction - goods identified when K made are destroyed by no fault of either party before risk of loss passes to buyer;
-> K is avoided,
-> both parties are discharged,
AND
-> neither party is in breach
Goods damagd but not destroyed
-> K avoided
OR
-> buyers an choose to take goods at reduced price without any other claim against seller
Risk of loss passed to buyer
-> K is not avoided
AND
-> seller may demand performance by buyer
What happens if there is destruction or damage of non identified goods due to no fault of either party before risk of loss passes to buyer?
When does risk of loss pass to buyer in this situation?
If goods that have not been identified are damaged or destroyed without the fault of either party to the contract,
-> THEN the risk of loss is generally on the seller until the seller satisfies the contractual delivery obligations.
Upon the happening of that event (satisfaction of the contractual delivery obligation), the risk of loss shifts to the buyer.
