Pace Law: Contract

Question 1

What is a Promisor

Answer 1

The party to the contract making the promise to perform. (A person who makes the promise.

Question 2

What is a Promisee

Answer 2

The party to the contract to whom the promise has been made.

Question 3

Three things to ask yourself about a case and to truly understand it.

Answer 3

1. identify about what the parties are disputing
2. Is there a k?
3. Is there a term in dispute?

Question 4

Three theories of Recovery

Answer 4

1. Expectation Damages:
2. Restitution Damages:
3. Reliance Damages:

Question 5

1. Expectation Damages:

Answer 5

1. Compensatory damages in a contract action, which place the injured party in the same position he would have been in had he received the full benefit for which he contracted.
2. The court tries to put the plaintiff in the position he would have been in had the contract been preformed by the defendant.
3. The plaintiff should end up with a sum equal to the profit he would have made has the contract been complete.

Question 6

Restitution Damages:

Answer 6

1. How can the parties be restored to their position before the K been performed.
2. Compensation granted to remedy the defendant’s unjust enrichment that occurred at the plaintiff’s expense.
3. As the value to the defendant of the plaintiff’s performance. (Think unjust enrichment) Restitution damages can be awarded in a suit on the contract, or in a suit brought in quasi-contract

Question 7

Reliance Damages:

Answer 7

1. What monies were spent in reliance of the K being performed.
2. Alternatively, the court may award reliance damages, especially where restitution/avoidance would not work because one party has suffered losses but the other has not received benefits.
3. Reliance damages are the damages needed to put the plaintiff in the position he would have been in had the contract never been made . Therefore, these damages usually equal the amount the plaintiff has spent in performing or in preparing to perform. They are used either where there is a contract but expectation damages cannot be accurately calculated, or where there is no contract but some relief is justifiable. The main situations where reliance damages are awarded are: (Profit too speculative and Promissory estoppel.)

Question 8

Assent

Answer 8

An intention of a party to a contract to accept all terms and conditions listed in the contract

Question 9

§ 18 Manifestation of Mutual Assent.

Answer 9

1. Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.

Question 10

Mutual Assent:

Answer 10

1. Mutual Assent: For a contract to be formed, the parties must reach an agreement to which they “mutually assent.” This assent is almost invariably reached through that are called “the offer” and the “acceptance”
   
   1. Offer + acceptance = Assent.

Question 11

How do you determine Assent?

Answer 11

1. Objectively: Whether parties appear by their acts, words and other outward manifestations to agree to be bound.
   
   1. The requirement of mutual assent does not mean that the parties must agree (even by the objective standard) on all the terms of the contract. Instead, they must agree on the “major”** or **“essential” terms. If they disagree on minor terms, or if they have simply not provided for such minor terms, the court may conclude that one party’s understanding controls, or may supply the missing terms. But the parties must, despite the minor gaps or minor disagreements, intend to have a contract.
   2. To check the objective measure of an parties intention you can ask the following.
      
      1. What a reasonable person in the position of the other party would conclude that his objective manifestation of the intent meant.
2. Subjectively: Whether parties actually had a meeting of the minds actually intending to be bound
   
   1. Furthermore, an agreement between two parties does not have to be subjectively (in their minds) agreed upon, but it means that each party must act** in a way to have the other think **reasonably that an agreement has been reached. Not a subjective agreement

Question 12

Offer

Restatement 2^nd §24

Answer 12

1. An offer is a “manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.”
2. An “offer” is a statement or act that creates a “power of acceptance.” When a person makes an offer, she is indicating that she is willing to be immediately bound by the other person’s acceptance, without further negotiation.

Question 13

When is an offer vaild?

Answer 13

1. An offer is valid if it contains reasonably certain terms that offer to exchange something of value.

Question 14

What are some invalid offers?

Answer 14

1. Jokes (An offer made in jest is an invalid offer. If the offeree knows or should have known the offer is a joke)
2. Preliminary Negotiations (invitation to bid, Price Quotes, Proposals)
3. Advertisements (Invalid unless it contains a reasonably certain promise leaving no room for negotiation.)

Question 15

What are the Various methods an offer can be terminated

Answer 15

• A valid offer does not mean there will be a contract.
• An valid offer can be terminated before acceptance.

1. The offer is rejected by the offeree
2. The offeree makes a counteroffer
3. The offeror revokes the offer
4. The offer lapses by passage of time
5. Either the offeror or the offeree does or becomes incapacitated or death

Question 16

What are the types of offers that are irrevocable

Answer 16

• Option contracts: Created if the offeror keeps an offer open for a limited amount of time in exchange for the offeree’s consideration
  
  • Unilateral contract: Will form an irrevocable option contract when the offeree begins to perform because the partial performance serves as the offeree’s consideration
• Firm offers: ​
  
  • A signed writing
  • By a merchant who deals in goods
  • Explicitly assuring an offeree that an offer to buy or sell goods will be open for a limited amount of time

Question 17

Acceptance

Answer 17

1. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
2. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise
3. Acceptance by promise requires that the offeree complete every act essential to the making of the promise.
4. An acceptance is a voluntary act of the offered whereby he exercise a power conferred upon him by the offer, and thereby creates the set of legal relations called a contract.

Question 18

Who as the power to accept an offer

Answer 18

1. The power to give acceptance is created in the intended offeree if they know of the offer at the time of acceptance.

Question 19

When does an offeree’s response become an acceptance?

Answer 19

1. Acceptance is effective the moment it leaves the offeree’s possession to be given to the offeror.

Question 20

Mailbox Rule:

Answer 20

1. an acceptance is effective the moment it leaves the offeree’s possession to be given to the offeror. Also known as the mailbox rule, this means that an acceptance is effective upon dispatch
2. Otherwise, there would be no acceptance if improperly addressed and acceptance is lost.
3. Occasionally, an acceptance may be lost or improperly addressed. If an acceptance is lost, then it is still considered effective upon dispatch only if it was properly addressed, even if the offeror never received the acceptance at all.

Question 21

What are the situations where the mailbox rule does not apply?

Answer 21

1. Offeror prescribed a time an acceptance that is not the moment of dispatch
2. The contract is unilateral and unilateral contacts are accepted when fully performed.
3. If the contract is an option contract which is accepted upon receipt the mailbox rule would not apply.

Question 22

Silence is not considered an acceptance but

there are four exceptions what are they?

Answer 22

1. Offeree receives the offered services, despite opportunity to reject those services, as well as reason to know that compensation is excepted.
2. The offeree exercises dominion over offered property by acting inconsistently with the offeror’s ownership of that property
3. Prior dealings make it reasonable to expect to be notified of a rejection and, in the absence of a rejection, to conclude acceptance
4. Finally, silence may be an acceptance if the offeror and offeree intend for the offeree’s silence or nonverbal conduct to constitute an acceptance. The result is known as an “implied-in-fact” contract.

Question 23

Method of Acceptance

Answer 23

The offeror is the master of his offer. This means, in part that he may prescribe the method by which it may be accepted. For instance, he may require that it be accepted by a telegram, letter signature

Question 24

Unilateral Contract

Answer 24

1. A unilateral contract is one which involves an exchange of the offeror’s promise for the offeree’s act. That is, in a unilateral contact the offeree does not make a promise, but instead simply acts.

Question 25

Explain the acceptance of a Unilateral contract

Answer 25

1. An offer for a unilateral contract is accepted by full performance of the requested act.
2. Acceptance can be either by performance (in unilateral contract) or by promise to perform (in bilateral contract)

Question 26

Bilateral Contracts:

Answer 26

1. A bilateral contract is a contract in which both sides make promises.
2. Acceptance can be either by performance (in unilateral contract) or by promise to perform (in bilateral contract)

Question 27

mirror image” rule:

Answer 27

Under the common law, the offeree’s response operates as an acceptance only if it is the precise mirror image of the offer. If the response conflicts at all with the terms of the offer, or adds new terms, the purported acceptance is in fact a rejection and counter-offer, not an acceptance.

Question 28

Consideration

Answer 28

1. Consideration exists when something of value is exchanged in a bargain.
2. This means that the promisor must give something of value to the promisee, and, in exchange, the promisee must give something of value to the promisor. A promise has value, as does an act or forbearance.
3. Consideration distinguishes enforceable acts from unenforceable acts and gratuities.
4. Promisor not required to gain or benefit
5. Promisee not required to have loss or detriment

Question 29

Lack of Consideration

Answer 29

1. Adequacy of consideration does not affect enforceability of a contract.
   
   1. The promisor not required to gain or benefit
   2. Promisee not required to have loss or detriment
   3. Values need not be equal
   4. Mutuality of obligation not required
2. However, if the amount of consideration is so small that it is nominal, then there may be a lack of consideration.

Question 30

What are the types of considerations that commonly result in unenforceable contracts

Answer 30

1. Past consideration (Consideration given before the contract.)
2. Gifts: Gifts are also unenforceable due to the lack of an exchange or a bargain
3. Illusory promises: May appear to be supported by consideration, but they are not actually enforceable. An illusory promise doesn’t actually commit the promisor to do anything, because the promisor reserves a choice of alternative performances

Question 31

Forbearance

Answer 31

Refraining from engaging in some action that one has a right to undertake

Question 32

Promissory Estoppel:

Answer 32

1. Doctrine of Promissory Estoppel:
   
   1. A promise may be partially or fully enforced even if not supported by consideration.
   2. Promissory Estoppel: In the absence of consideration, a contract is enforceable if the promisee foreseeably** and **reasonably relies upon the promise to her detriment.

Question 33

What are the three elements of Promissory Estoppel

Answer 33

1. Promise
2. Reliance
3. Detriment

Question 34

What is actual reliance?

Answer 34

The promisee must actually rely on the promise

Question 35

What is foreseeable reliance?

Answer 35

1. The promisee’s reliance must also have been reasonably foreseeable to the promisor

Question 36

1. What are some possible applications P.E?

Answer 36

1. Promise to make gift. The P.E. doctrine is most often applied to enforce promises to make gifts , where the promisee relies on the gift to his detriment.
2. Charitable subscription
3. Gratuitous bailmens and agencies (Didn’t learn this)
4. Offers by sub-contractors
5. Promise of a job.
6. Negotiation in good faith

Question 37

What are the Three elements of Promissory Estoppel. ​

Answer 37

1. The promisor must make a promise reasonably expecting to induce the promise’s action or forbearance
2. The second element of promissory estoppel requires the promisee to have relied on the promise. The promisee’s reliance** **is considered to be equivalent to consideration and is what makes the promise binding.
3. The third element of promissory estoppel requires enforcement to be necessary in order to avoid injustice. Typically, this means that the promisee must have suffered a substantial detriment as a result of relying on the promise

Question 38

Remedy regarding Promissiory Estoppel

Answer 38

1. When applying the doctrine of promissory estoppel, courts usually limit the promisee’s remedy to only what justice requires. This typically means that a court will only enforce the part of the promise that the promisee has actually relied on, by placing the promisee back in the position that she would have been in had the promise never been made.

Question 39

Restitution

Answer 39

1. Availability of restitution
   
   1. If an enforceable contract is breached, a party may have an interest in the restoration of any benefit conferred on the other party. This interest is known as restitution,** or the **prevention of unjust enrichment.
2. Restitution damages attempt to prevent the unjust enrichment** of the defendant by returning to a plaintiff who has **partially performed the value of the performance he has rendered to the defendant.
3. To receive restitution, the party seeking restitution, who may be either the injured or breaching party, must have already rendered partial performance. An injured party may also receive restitution after full performance, but only if the breaching party still owes non-monetary performance.

Question 40

What are the two type of Restitution damages:

Answer 40

1. The first type is restitution damages in the form of a sum of money. The amount of money will be calculated by either the reasonable value of the given performance or the extent of enrichment of the other party’s interests.
2. The second type of restitution is specific restitution, which allows a party to recover a specific thing, rather than an amount of money.

Question 41

Quasi-contracts

Answer 41

In some situations, a party may be able to recover restitution, even if there is not an enforceable contract or even any contract at all. If one party confers a benefit onto the other, courts may imply a contract for the purpose of preventing unjust enrichment. Known as a quasi-contract, this allows the party that conferred the benefit to recover restitution.

Question 42

Precontractual Liability (Binding Agreement with Formal)

Answer 42

Binding Agreement with Formal

(Written Document to Follow)

Type 1 Preliminary Agreement: Is an agreement that envisions a more formal future contractual document and legally commits the parties to their ultimate contractual goal.

This is when both parties agree on all points that required negotiation and this includes whether to be bound but agree to have it memorialize their agreement in a more formal document. Such an agreement is fully binding. This “preliminary agreement” is preliminary in form only meaning both parties desire to have an more elaborate formulation of the agreement.

Type II** **Preliminary Agreement: Commits the parties to the duty to negotiate in good faith toward their ultimate contractual goals.

A binding preliminary agreement binds both sides to their ultimate contractual objective in recognition that and this is despite of the anticipated further formalities. Accordingly, a party may demand performance of the transaction even though the parties fail to produce the more elaborate formalization of the agreement.

Remember in these situations there is a contract, not precontractual liability. Meaning the parties have concluded their contract but they never reduced it to their final form.

Question 43

Precontractual Liability

Unjust Enrichment

Answer 43

Defined: A quasi-contract theory that prevents a party from retaining a benefit conferred on that party to the detriment of the other party if it would be unjust for the enriched party to retain that benefit

Question 44

Precontractual Liability

Misrepresentation

Answer 44

• A misrepresentation of intent is as much of a misrepresentation of fact as a misrepresentation about the nature of the goods or services involved in the proposed transaction.
• A Party who represent that he wants to come to terms and conclude a bargain, when he has no such desire should be liable for the expenses the other party incurs in honestly participating in negotiations over a proposed contract.
• If an party can show that the other party made a misrepsentation to them prior signing. Two things can happen (1) he may use this as a defense in a breach contract action brought by the other or (2) he may use it as the grounds for rescission or damages in a suit in which he is the plaintiff

Question 45

Precontractual Liability

What are the elements of proof Re Misrepresentation

Answer 45

• (1) Other parties state of mind: Plaintiff does not generally have to prove that the misrepresentation will usually be sufficient to avoid the contract if it is made as to a material fact.
• (2) Positive concealment: If a party takes positive action to conceal the truth. Example: TO conceal termite damage, Seller plaster over wooden beams in the house he is selling.
• (3) Failure to correct past statement: if the party knows that disclosure of a fact is needed to prevent some previous assertion from being misleading and doesn’t disclose it, this will be actionable.
• (4) Fiduciary Relationship: If the parties have some kind of fiduciary relationship, so that one believes that the other is looking out for her interests, there will be a duty to disclose material facts.
• (5) Failure to correct mistake: If one party knows that the other is making a mistake as to a basic assumption, the former’s failure to correct that misunderstanding will be actionable if the non-disclosure amounts to a failure to act in good faith” Example: Jeweler lets Consumer but a stone, knowing that consumer falsely believes that the stone is an emerald when it is in fact a topaz worth much less. This would probably be such bad faith that it would constitute misrepresentation.

Question 46

What are some promises that are made during a negotiations

Answer 46

1. Irrevocable offers: It is a promise to keep an offer open. An offer maybe irrevocable on one of several grounds. (1) if it is a traditional option contract supported by consideration where there is part performance of an offer that can be accepted by performance or the offeree otherwise reasonably relies on an express or implied promise that it would remain open.
2. Promissory Estoppel: person who has been induced to incur expenses based on assurances that the parties will subsequently enter into a contract, may recover for those expenses, even though the details of the promised later contract are too sketchy to enforce fully.

Question 47

What does it mean to Duty to Bargain in Good Faith

Answer 47

The court would like both parties to negotiate in good faith. Beach of this duty might lead to liability to the other party to the negotiations, permitting recovery for some or all of the expenses that the injured party has incurred during their negotiations.

Question 48

Parol Evidence Rule

Answer 48

• When interpreting a contract, courts may look to evidence to determine which terms may be enforced, as well as how those terms should be enforced. However, not all relevant evidence may be used to when proving the terms of the agreement
  
  • Rule and Rationale: The parol evidence rule is not a rule of evidence, but rather a rule of substantive contract law. Under the parol evidence rule, extrinsic evidence may not be used to modify or supplement a written contract. For example, if Molly signs a lease contract to rent an apartment for $1,000 per month, she may not provide extrinsic evidence that the leasing office previously agreed to rent her the apartment for $800 per month. The rationale behind the parol evidence rule is that the parties to an agreement will include all of their terms in a written contract, so any terms that are not in the written contract were not intended to be part of the final agreement.
  • Integrated agreements: The parol evidence rule only applies to written contracts that are integrated agreements. Contemporaneous written contracts are typically considered to be part of the same integrated agreement. For instance, any related documents that were also signed by Molly when she signed her lease contract would be considered part of the same integrated agreement. A completely integrated agreement is a writing that has been adopted by the parties as a final and complete statement of the terms. A partially integrated agreement, on the other hand, is a writing that has been adopted by the parties as a final but incomplete statement of the terms. For example, if Molly’s lease contract contains all of the final terms of her agreement, except for the amount of her security deposit, then her contract will be a partially integrated agreement. For the parol evidence rule to apply, an integrated agreement must also be binding.
  • Exceptions: There are several common exceptions to the parol evidence rule. First, extrinsic evidence may be used to establish whether a written contract is an integrated agreement, as well as whether an integrated agreement is completely or partially integrated. For example, Molly may testify that the lease contract was not integrated, or that the contract is only a partial integration. Second, extrinsic evidence may be used to clarify the meaning of an ambiguous term

Question 49

merger clause

Answer 49

recites that the agreement is the complete agreement between the parties. This is usually strong evidence that the writing is a complete integration.

Question 50

Use of extrinsic Evidence

Answer 50

• Courts allow extrinsic evidence to aid the interpretation of a contract, even if the writing is an integration.
• If a term is found by the trial court to be ambiguous meaning cable of more then one meaning then extrinsic evidence must be allowed.
• The courts are in a agreement that the types of extrinsic evidence that is allowed are to help resolve the meaning of ambiguous tems which are extremely broad. Also, what the parties pre-contractual negotiations indicated to be the meaning of the ambiguous term is to be admitted and heard by the jury.

Question 51

How does the judge determine existence of ambiguity

Three approaches

Answer 51

Four corner rule

Stringent.

When the judge decides whether the term is ambiguous, the judge may not consult any extrinsic evidence whatsoever. This means that the existence of ambiguity is to be determined solely by looking within the four Corner of the contract itself. Thus not only will the court not consider evidence about the parties’ negotiations, it will not even consider evidence about the context surrounding the making of the agreement. (Thompson v. Libby)

Plain meaning

Middle in term of Stringent.

The most significant aspect of the plain meaning rule is that when the court goes to decide whether a term used in the agreement is ambiguous, the court will not hear evidence about the parties’ preliminary negotiations. (However, the court will hear evidence about the circumstances, or “context,” surrounding the making of the agreement.)

Liberal Rule

Significantly weakens the plain meaning approach. Under the liberal view evidence of the parties statements during their pre-contract negotiations is admissible for the limited purpose of letting the trial judge determine whether the term is ambiguous for the limited purpose of letting the trial judge determine whether the term is ambiguous

Question 52

Adhesion Contracts

Answer 52

is an imprecise term used to describe a document containing non-bargained clauses that are in fine print, complicated, and/or exceptionally favorable to the drafter. Generally, adhesion contracts are found in situations where the non-drafter has very little bargaining power, because all potential parties on the other side have similar terms that they offer on a non-negotiable “take it or leave it” basis.

Question 53

Adhesion Contracts

Steps for avoiding Contract

Answer 53

A litigant who wants to avoid enforcement of a contractual term on the grounds that it is part of an adhesion contract usually has to make two showings:

(1) that the contract itself is an adhesion contract; and [2] that the contract (or the clause complained of) either (i) violates his reasonable expectations or (ii) is unconscionable.

Question 54

Mutual Mistake

Answer 54

If both parties have the same mistaken belief the mistake is said to be mutual

Question 55

Mutual Mistake

Three requirements for avoidance:

Answer 55

Three requirements for avoidance: Three requirements must be satisfied before the adversely-affected party may avoid the contract on account of mutual mistake:

1. Basic assumption: The mistake must concern a basic assumption on which the contract was made. (Examples: The belief that a violin is a Stradavarius when it is in fact a worthless 20th century imitation is a “basic” mistake. But the seller’s belief that a buyer to whom he is selling on credit is credit-worthy is probably a “collateral” rather than a “basic” mistake.)
2. Material effect: The mistake must have a material effect on the “agreed exchange of performance.” (Example: If both Buyer and Seller thinks that a violin is a Stradavarius, but it is in fact a Guarnarius worth almost the same amount, the mistake would not have a “material effect” on the agreed exchange.)
3. Risk: The adversely-affected party (the one seeking to avoid the contract) must not be the one on whom the contract has implicitly imposed the risk of the mistake. Often, the contract does not make it clear which party is to bear the risk of a certain type of mistake, so the court allocates this risk in the manner that it finds to be “reasonable” in the circumstances

Question 56

Impracticability

Answer 56

Modern view of impracticability: Modern courts generally equate “extreme impracticability” with “impossibility.” In other words, if due to changed circumstances, performance would be infeasible from a commercial viewpoint, the promisor may be excused just as he would be if performance were literally impossible.

Question 57

Frustration of Purpose

Answer 57

Frustration generally: Where a party’s purpose in entering into the contract is destroyed by supervening events, most courts will discharge him from performing. This is the doctrine of “frustration of purpose.”

Question 58

Statue of Frauds

Answer 58

1. A statute adopted by jurisdictions to prevent fraud by specifying that certain agreements must be in writing and signed by the party against whom enforcement is sought.
2. An otherwise valid contract is unenforceable if the contract
   
   1. Triggers the statue of frauds
   2. Fail to satisfy the statue of frauds

Question 59

Statue of Frauds Name the 6

Answer 59

1. Marriage:
2. Years:
3. Land:
4. Executorship
5. Goods
6. Suretyship

Question 60

SATISFACTION BY PERFORMANCE

Answer 60

1. Performance of oral agreements can satisfy the statute of frauds under the following circumstances.
2. Common Law Services Contracts under the One-Year Provision
   
   1. Under the common law, FULL performance of a services contract by either side satisfies the statute of frauds. Part performance does NOT satisfy the statute of frauds.
3. Contracts to Transfer, Receive, or Create an Interest in Real Estate
   
   1. In most jurisdictions, the seller in a real estate contract can satisfy the statute of frauds by FULL performance (i.e., conveying the land to the buyer).
   2. In most jurisdictions, the buyer in a real estate contract can satisfy the statute of frauds by performance if any two of the following three are met: (1) the buyer takes possession of the property; (2) the buyer makes payment in full or part; AND/OR (3) the buyer makes substantial improvements to the land.
      
      1. Notably, under a lease agreement, a tenant typically takes possession, makes payment, and might make minor improvements to the property. Thus, to satisfy the statute of frauds, the possession, payment, and/or improvements must be substantial enough to show that the transaction is more than a lease agreement.
      2. If the buyer satisfies the statute of frauds by performance, his recovery under the contract is limited to equitable relief (i.e., specific performance), not monetary damages.

Question 61

Performance as Consideration

Answer 61

If, at the promisor’s request, the promisee performs some act in exchange for the promise, consideration exists and the promise is enforceable. Cases involving rewards, such as where a person makes a promise to pay $10,000 for information leading to the conviction of a criminal, involve the exchange of a performance for the promise of the reward. The person who, in response to the promise of a reward, provided the necessary information, supplied the requested consideration for the promise, and has a legal right to recover the reward.

Question 62

Breach

Answer 62

• Breach: Nonperformance of a contractual duty is a breach unless the nonperformance is excused.
• breach a contract, where one party fails to perform duties under a contract

Question 63

Repudiation

Answer 63

explore the doctrine of anticipatory repudiation, which allows a party to sue for a remedy before a breach has even occurred.

Question 64

Material Breach

Answer 64

(1) the extent of the harm to the injured party;
(2) the adequacy of monetary damages to compensate for the injured party’s loss;(3) the ability and willingness of the breaching party to implement a cure;
(4) the good faith of the breaching party; and
(5) the extent to which the breaching party will suffer a forfeiture if the breach is treated as material.

Question 65

What is a breach?

Answer 65

full performance of a duty under a contract discharges the duty. When performance of a duty under a contract is due, any non-performance is a breach.” In other words, a breach occurs when a party has failed to fully perform by the due date of the performance

Question 66

Anticipatory repudiation

Answer 66

A party may also sue for a remedy even when a breach has not yet occurred, based on anticipatory repudiation by the other party. Anticipatory repudiation may take one of two forms.

1. First, the repudiating party may give a statement clearly indicating the intention to breach
2. Second, the repudiating party may take an action that renders him unable to perform. The action must be voluntary and affirmative.

Question 67

Substantial Performance

Answer 67

Recall that it is a constructive condition to a party’s duty of performance that the other party have made a “substantial performance” of the latter’s previous obligations. In other words, if one party fails to substantially perform, the other party’s remaining duties do not fall due.

Question 68

Terms of the contract

Answer 68

Good Faith

Parol Evidence Rule

Use of Extrinsic Evidence to explain a term.

Question 69

Policing the bargain – Void and Voidable Contracts

Answer 69

Pre-existing duty rule

Good faith

Duress

Undue influence

Concealment/Misrepresentation/Fraud

Public Policy

Unfairness

Unconscionable

Statute of Frauds

Question 70

Excuse for non-performance

Answer 70

Impracticability

Impossibility

Frustration of purpose

Mistake: mutual mistake is a reason for non-performance, but unilateral mistake is not