Excuses for Nonperformance Flashcards
What are conditions of a K?
Agreed upon limitations on performance; make an obligation to perform contingent on the occurrence of some specific event or condition
What is a condition precedent?
Performance is not obligated unless condition occurs; nonoccurrence excuses performance.
What is a condition subsequent?
Condition that occurs after performance has begun and excuses further performance.
What is the difference between failing to fulfill a condition versus breaking a promise?
failure of a condition relieves a party’s performance obligation;
failure of a promise leads to a breach
Substantial performance of the condition may suffice if it
fulfills the condition’s promise
Condition can be waived if
the person who is protected or benefitted by the contain makes statements that constitute a waiver of the condition or estop the condition from being enforced.
What is excuse by insecurity?
It arises if A gives B resaonable grounds for insecurity or uncertainty (by words or conduct) regarding whether A will perform under the K
If a party is insecure, they have two options:
- demand adequate assurances
- suspend performance (if commercially reasonable) until she receives adequate assurances
E.g. A gress to buy leather sofas from B; after K formation before delivery is due, A learns that B sold vinyl sofas to other buyers who ordered leather and that delivery was late. A has reasonable grounds for insecurity and thus may utilize the above options
What is anticipatory repudiation?
When one party to a K makes it CLEAR that he will not perform under the K; excuses performance by the other party.
What are the three elements of anticipatory repudiation?
- Makes an unambiguous statement or conduct
- prior to the time performance is due
- which indicates he will not perform
What is the effect of anticipatory repudiation?
the non-repudiating party’s duty to perform is excused; he may treat the K as breached and sue.
Ex: A hires B to remodel A’s kitchen. B is almost finished with the remodel when A tells B she does not want the remodel and will not pay B.
B can treat the K as breached, stop work, and sue for damages.
When will performance on a K be excused as impossible or impracticable?
If an unforeseen event occurs after K formation but before performance is complete.
What are the requirements to excuse performance?
- an unforeseen event, the nonoccurence of which was a basic assumption of the parties, which makes performance either:
- impossible or impracticable. (only possible with extreme and unreasonable difficulty or expense)
Common unforeseen events:
- substantial damage or destruction of K’s subject matter (damage can’t be party’s fault)
- death - K obligations generally survive the death of a party, unless deceased party’s K obligations are non-delegable
- subsequent law or regulation - if performance becomes illegal, excuse by impossibility
