Material Breach Flashcards
1
Q
Elements of Material Breach
A
- Any non-performance of a contract duty (obligation, responsibility)
- At a time when performance is due
2
Q
Characteristics of Material Breach
A
Characteristics
1. Failure/refusal to perform contract duties
2. Failure to properly perform contract duties (can still breach if not performed in the proper way)
3. Performance is not due if the non-performance is justified
3
Q
Two types of breach
A
- Total Breach
- Partial Breach
4
Q
Total Breach aka Material Breach
A
- Breach is severe, material
- Allows the non-breaching party to sue immediately
5
Q
Anticipatory Repudiation Definition
A
- A party notifies the other party before the date of performance that the party will not perform
- This notice repudiates (terminates) the contract
- This notice discharges (excuses) the non-breaching party from the duty to perform
- The non-breaching party can sue for breach immediately, or, can wait until the date of performance, then sue for breach
6
Q
Characteristics of Anticipatory Repudiation
A
- The notice can be given orally, in writing, can be shown by conduct which shows an unwillingness to perform, or can be shown by “reasonable grounds for insecurity” (e.g., serious financial problems, shortage of materials)
- If the notice merely expresses “doubt” as to performance, doubt alone is insufficient to show anticipatory repudiation
- “Grudging” willingness to perform is insufficient
- Repudiation must be made to the promisee, not to a third party
7
Q
Breach Materiality Factors
A
- deprivation of expected benefits
- adequacy of compensation for the loss
- past performance/preparation to perform
- likelihood breach will be cured
- willfulness of breach
- balancing of hardships
8
Q
Reliance Factors
A
- Has the non-breaching party sued the breaching party?
- Has the non-breaching party materially changed its position?
- Has the non-breaching party indicated that the AR is final?
