Discharge of Duties

Question 1

Impracticability

When is it available

Answer 1

Defense available if:

1. Performance becomes illegal after K is made;
2. Specific subject matter of K is destroyed;
3. Performing party to the K dies or becomes incapacitated (personal services K)
4. Performance becomes impracticable

Question 2

Impracticability Elements

Answer 2

1. Unforeseen event has occurred.
2. Non-occurance of event was basic assumption on which K was made; and
3. Party seeking discharge is not at fault

Question 3

Impracticability

Timing

Answer 3

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

Question 4

Partial Impracticability

Answer 4

Temporary impracticability only suspends duty; discharged if performance is materially more burdensome after impracticability ends

Question 5

Frustration of Purpose

Answer 5

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 its not within assumed risk inherent in K

Question 6

Rescission

Answer 6

Cancelling of K so as to restore parties to their positions before K was made
Grounds for recission must have existed at the time the K was made.
Recission also possible by mutual agreement of parties: surrender of rights under the original K is consideration for the recission.