excuses for nonperformance

Question 1

condition precedent

Answer 1

condition must occur before performance due; non-occurrence excuses performance

Question 2

condition subsequent

Answer 2

condition that occurs after performance has begun and excuses duty to perform

Question 3

insecurity

Answer 3

arises when a party to a K has reasonable grounds to believe that the other party will be unwilling or unable to perform under the K

Question 4

demand for adequate assurances

Answer 4

must be made in writing based on reasonable and justified grounds for insecurity; no response required if demand is unjustified or unreasonable

Question 5

adequate assurances

Answer 5

commercially reasonable commitment from a party that it will perform under the K; if not provided, insecure party may treat K as repudiated

Question 6

anticipatory repudiation

Answer 6

arises when one party to a K makes it clear that he will not perform under the K; excuses performance by other party

Question 7

anticipatory repudiation requirements

Answer 7

1) unambiguous act
2) prior to full performance
3) indicating nonperformance

Question 8

withdrawal of repudiation

Answer 8

repudiation can be withdrawn unless other party has either
1) materially changed position in reliance on the repudiation
2) cancelled the K in response to the repudiation
3) indicated they consider the repudiation to be final

Question 9

non-repudiating party’s options

Answer 9

may either:
1) treat anticipatory repudiation as a total repudiation and sue
2) suspend performance until performance date is due and wait to sue
3) treat repudiation as an offer to rescind and treat K as discharged
4) ignore repudiation and urge promisor to perform

Question 10

impossibility/impracticability requirements

Answer 10

an unforeseen event, which neither party assumed would occur, must make completing performance either:
1) impossible (objectively impossible)
2) impracticable (only possible with extreme and unreasonable difficulty/expense)

Question 11

frustration of purpose

Answer 11

a K may be discharged if:
1) an unexpected event destroys one or both party’s purpose for entering into the K
2) unforeseen event is not the fault of the frustrated party and
3) non-occurrence of the event was a basic assumption of the K