Excuse for Performance Based on Later Events

Question 1

Does the other party’s breach provide an excuse for non-performance in an Article 2 Sale of Goods K?

Answer 1

Yes- If seller’s performance is not perfect in every respect the buyer can reject everything, accept some and reject others, or accept all. Whichever option the buyer chooses, the buyer can still get damages for lack of perfect tender.

Question 2

Does the other party’s breach provide an excuse for non performance in a Common Law K?

Answer 2

• the injured party can recover damages for ANY breach, material or not
• only a MATERIAL BREACH provides an excuse for non-performance

Question 3

Anticipatory Repudiation

Answer 3

• Non-repudiating party can stop work and sue for damages so long as she was ready, willing, and able to perform (treat as an immediate breach)
• an anticipatory repudiation can be retracted as long as the non-repudiating part has not relied on it

Question 4

Adequate Assurance (Article 2)

Answer 4

• a party w/ reasonable grounds for being insecure about the other party’s performance may request in writing adequate assurance that the other party will perform in accordance with the K
• Failure to give adequate assurance can be treated as an anticipatory repudiation and the party seeking assurance can immediately consider the K breached and refuse to uphold his end of the bargain.
• what is adequate depends on the facts & circumstances

Question 5

Def: Rescission

Answer 5

An agreement to cancel the K. For a rescission to be effective, each party must have at least some performance remaining. That sacrifice of owed performance qualifies as consideration for the agreement to rescind.

Question 6

Def: Accord & Satisfaction

Answer 6

An accord is an agreement to accept performance in FUTURE satisfaction of an existing duty; satisfaction is performance of the accord. The existing duty is extinguished only when the accord is satisfied.

Ex- Opie borrows $500 from Helen and promises to repay w/ interest. Later, they agree that if Opie mows her lawn for year then Helen will discharge the debt. If Opie does not mow the law as promised, Helen can sue him on either the lawn deal OR the $500 debt b/c the existing duty is not extinguished until the accord is satisfied.

Question 7

Def: Novation

Answer 7

An agreement to substitute a new party for an existing one

Question 8

Def: Impossibility/Impracticability

Answer 8

A later UNFORESEEN event that makes performance impossible/impractically may provide seller w/ an excuse

Question 9

Destruction of Something Necessary for performance

Answer 9

CL- excuse for non-performance

Article 2-

• a seller who bore ROL when goods were destroyed/damages is excused by impracticability
• seller is excused only if the goods that were damages or destroyed had been identified to the contract

Question 10

Death/Incapacity as an excuse…

Answer 10

Only if the person was ESSENTIAL

Question 11

Increase in the Cost of Seller’s Performance as excuse…

Answer 11

MBE- an increase in the seller’s cost ALMOST NEVER excuses a seller

NY DISTINCTION– more flexible; ask “exactly how much more is it going to cost?” and “what percentage is the increase?”

Question 12

Frustration of Buyer’s Primary Purpose

Answer 12

Excuse only if seller knew of the primary purpose when they entered the K

Question 13

Failure of an Express Condition as Excuse

Answer 13

• strict compliance required, if fails then excuse

- “satisfaction” is measured by a reasonable person standard unless the K deals w/ art or matters of personal taste

Question 14

Excusing an express condition?

Answer 14

Occurrence of a condition may be excused by the later action or inaction of THE PERSON WHO IS PROTECTED BY THE CONDITION.

• failure to cooperate
• waiver