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Contract Law 1L > Module 12 > Flashcards

Module 12 Flashcards

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0
Q

What is a condition precedent?

A

Event must occur before a duty to perform contractural promise arises

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1
Q

What is a condition?

A

Act or event, other than lots of time, that, unless excused, must occur before a duty to perform a contractual promise arises, or that discharges a duty of performance that has already arisen

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2
Q

What is a condition subsequent?

A

Discharges a duty of performance that has already arisen

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3
Q

What is an unconditional promise?

A

Promise that is independent and absolute

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4
Q

Why is a lapse of time not a condition?

A

Because it is an event that is certain to happen

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5
Q

What It is the official definition of conditions precedent?

A

An act or event, other than lapse of time, that must exist/occur before a duty to perform a promise arises. If it doesn’t happen or isn’t excused, the performance doesn’t have to be given

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6
Q

Who has the burden of proof for condition precedent?

A

The party that sues on a promise has the burden of proving that conditions precedent attached to the duty to perform or comply with, otherwise there’s no preach

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7
Q

What is the official definition of conditions concurrent?

A

When the parties agree to exchange performances at the same time

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8
Q

What must one-party do in order to put the other in default when it comes to conditions concurrent?

A

Must tender the performance

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9
Q

What is the official definition of conditions subsequent?

A

Any event the discharges a duty of performance that has already arisen

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10
Q

Who has the burden of proof for condition subsequent?

A

The party claiming that it duty that has already arisen as been discharged has the burden of proof on that issue ie) insured person must prove there was a fire

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11
Q

What is the functional approach to conditions?

A

Sometimes what is by definition a condition precedent is treated as a condition subsequent, so the burden of proof is on the party with better access to the facts

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12
Q

What are the two different ways to classify conditions?

A

A) based on the timing of the event

B) based on the way the condition arises

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13
Q

What is an express condition?

A

Created by agreement of the parties and must be strictly performed

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14
Q

What is a condition implied in fact?

A

The condition that is not spelled out in words, but rather gathered from the terms of the contract as a matter of interpretation ie) if you agree to paint the house, and they agreed to give you the paint. You cannot perform without the paint, so supplying it is an implied in fact condition to your duty to paint

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15
Q

What is the difference between express conditions and promises?

A

Failure to perform a promise, unless excused, is a breach. Failure to comply with the condition is not

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16
Q

How does it work when contractors are supposed to pay subcontractors, but don’t?

A

A) condition: subcontractor is not entitled to payment because the condition hasn’t been met that is expressly stated in the contract
B) language of time: the language doesn’t create a condition, is intended to set a convenient time for payment, and if owner doesn’t pay general contractor, then general contractor must pay subcontractor within a reasonable time

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17
Q

What is the split about agreements to pay when able?

A

A) majority says this is the language of condition

B) minority says this is a promise that payment will be made in a reasonable time

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18
Q

If you’re making a contract and you want the strict compliance of an express condition, what do you need to do?

A

Must use clear language of express condition. Words like if, on condition that, subject to, provided, unless

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19
Q

How can language of condition also imply a promise?

A

If you make a contract for a sale saying that performance is contingent on getting a mortgage loan. The condition is that the person has impliedly promised to use reasonable efforts to make the loan happened, and without his efforts, the condition can’t occur. Which would be a breach of contract

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20
Q

What are constructive conditions?

A

Imposed by law to do justice, and substantial compliance is sufficient. Contract doesn’t expressly conditioned anything, but the law constructs a condition to do justice

21
Q

What is an implied in fact condition/express condition?

A

This is limited to the types of situations involving cooperation, and demands strict compliance

22
Q

What is the rule for performance of constructive conditions?

A

Only have to be substantially performed

23
Q

What is the rule for omitted terms?

A

Parties don’t cover a term, the court, in the interest of justice, will supply it. And then it becomes a full-fledged promise

24
Q

Omitted terms are supplied by the covenant of what?

A

Good faith and fair dealing

25
Q

Conditions must be either of two things in order to be mature?

A

Excused or satisfied

26
Q

Where do conditions subsequent most often pop up?

A

Insurance contracts

27
Q

What Are the two different kinds of express conditions?

A
  1. Simple or true conditions

2. Conditions and covenants

28
Q

What is a simple or true condition?

A

Event is outside of the control of either party to the contract ie) Dow Jones

29
Q

How do conditions and covenants work?

A

When I condition in the contract is something that parties have some or all control over it is both a condition and the covenant/promise ie) I will buy your house if I get financing. The financing is the condition precedent, but applying for the loan and getting approved is your obligation to use good faith efforts. If you do not, that will cause the condition to go away, and a breach

30
Q

What are the three easy rules to finding constructive conditions?

A

A) if one party’s performance precedes the other’s
B) if one party’s performance takes longer than another’s
C) performances are simultaneous

31
Q

What Is the constructive condition if one party’s performance precedes the other’s?

A

The first is a constructive condition to the second

32
Q

How does it work if one party’s performance takes longer than another’s?

A

The longer performance is a constructive condition to the shorter

33
Q

If simultaneous performances occur, what is the constructive condition?

A

That the parties’ performances are constructively conditioned concurrently on each other

34
Q

What are the different ways a condition can be excused?

A
  • voluntary

- forced

35
Q

What are the two voluntary ways a condition can be excused?

A

A) waiver

B) estoppel

36
Q

How does a waiver work to excuse the condition?

A

Is the relinquishment of a right, where the party entitled to it says they know they are entitled to it, but they are willing to give it up

37
Q

How does Estopel voluntarily excuse a condition?

A

Where a party entitled to a condition says they will not require it, and the other party changes position as a result of it

38
Q

What are the forced ways to excuse conditions?

A

A) failure to cooperate
B) prevention
C) anticipatory repudiation

39
Q

How is failure to cooperate a forced way to excuse a condition?

A

When the party entitled to a condition fails to cooperate in the occurrence of the condition, that means a condition is excused and taken away, so the party must perform anyway. Ie) I must get financing as a condition to buy your house, I must use reasonable and good faith efforts to make that occur, if I don’t I have an obligation to buy the house even though the loan wasn’t approved

40
Q

How is prevention a forced way to excuse a condition?

A

If you prevent the performance of an event, the condition is excused and you have to pay regardless, so long as it can be shown that you acted in bad faith. Ie) intentionally failing to be satisfied by at painting of you

41
Q

How can anticipatory repudiation be a forced way to excuse conditions?

A

Where a party entitled to the condition repudiates before the event happens, a condition is excused and the person is immediately liable for breach. Ie) green to buy a house if you can get financing, but then calling and repudiating, you now have to buy the house regardless of whether you get financing, and the breach is accelerated, so you can be sued immediately

42
Q

What are the two ways you can repudiate a contract?

A

A) expressly: tell them you repudiate
B) by conduct: you don’t say anything overtly, but you do an act that prevents you from performing the contract ie) the green to buy a house if you get financing, then filing for bankruptcy, which presents the other from purchasing (excuses all conditions and accelerates the breach)

43
Q

What is a demand for adequate assurance of performance?

A

When a party is uncertain about whether the other will perform, they can demand in writing an adequate assurance of performance, and if it isn’t responded to within a reasonable time (30 days) that is a repudiation

44
Q

When is complete satisfaction required?

A

A) for express conditions

B) for the single delivery of goods under the UCC

45
Q

What is perfect tender under the UCC?

A

The delivery must be exactly what was ordered, if it isn’t, then the buyer can reject the tender, send it back, and doesn’t have to pay for it

46
Q

When is substantial satisfaction required?

A

All conditions except express and perfect tender

47
Q

How does satisfaction work for divisible contracts?

A

You can satisfy conditions in the divisible parts like any other part of the contract must be satisfied ie) painting 10 houses, once you finish the first, that triggers the first payment, and so on

48
Q

What are the six basic defenses to contract formation?

A
  1. Statute of frauds
  2. Capacity
  3. Duress
  4. Unconscionability
  5. Fraud
  6. Mistake
49
Q

How do courts determine if it is a promise or condition?

A

Unless the language is clear, the court will assume it is a promise

50
Q

Why do courts prefer to assume there’s a promise and not a condition?

A

Because the courts up for a total forfeiture, which is what happens when a condition is not met

Contract Law 1L (11 decks)

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