Excuse for Non-Performance Based on Later Events Flashcards
Does breach by the other party excuse performance?
Under Article 2, if the seller fails perfect tender, the buyer may i) reject the entire shipment, ii) accept the entire shipment, or iii) accept some and reject others. (No matter what, buyer can get damages for breach of contract)
Under the common law, the injured party may recover damages for any breach, but only a material breach will excuse performance.
The materially breaching party can still recover the reasonable value of the services they did perform (restitution).
What are the rules for breach for a divisible contract?
If payment is per unit, breaching party can recover the contract price for any unit on which he has substantially performed.
What is anticipatory repudiation?
An unequivocal statement regarding the party’s intent not to perform his obligations under the contract. It is treated like a material breach.
May a repudiating party retract his repudiation?
Yes, so long as the other party has not relied on it.
Is anticipatory repudiation sufficient to excuse performance?
Yes. The non-repudiating party may immediately sue for breach if they are ready, willing, and able to perform their end of the contract.
Under Article 2, can failure to give adequate assurances excuse performance?
Yes. If a party with reasonable grounds for insecurity requests in writing adequate assurances that the other party will perform, and the other party fails to give such assurances, it may be treated as an anticipatory repudiation.
What are the ways in which a later agreement can excuse performance?
- Rescission - agreement to cancel; each party must have some performance remaining.
- Modification - agreement to replace the existing contract
- Accord and Satisfaction
- Novation - an agreement to substitute a new party for an existing one (both parties must consent)
What is an accord and satisfaction?
An accord is an agreement to accept performance in future satisfaction of an existing duty. Satisfaction is performance of the accord.
Look for “if, then” language
When does impossibility of performance occur?
When a later, unforeseen event makes performance impossible (Art 2: “impracticable”)
Does destruction of something necessary for performance give rise to impossibility?
Under the common law, destruction provides an excuse for non-performance.
Under Article 2, a seller who bore the risk of loss when goods were damaged or destroyed is excused by impossibility. The destroyed goods must be clearly identified to the contract.
When can death or incapacity give rise to impossibility?
When the death or incapacitation is of an essential person. An essential person is one with special skill or knowledge.
Can government regulations give rise to impossibility?
Yes.
Can an increase in the cost of seller’s performance give rise to impossibility?
MBE - Almost never. The seller assumed the risk when he entered into a fixed-price contract
NY - Evaluate the actual cost increase and the percentage cost increase
Under what circumstances will a frustration of the buyer’s purpose in entering into the contract excuse performance?
Only when the seller / lessor knows of the buyer’s primary purpose when entering into the contract.
What are the two types of express conditions?
Precedent - occurrence gives rise to an obligation
Subsequent - occurrence cuts off an obligation
