Page 42 Flashcards
If a construction project is destroyed, without the fault of the contractor, why is he still obligated to complete the building?
Because the contract was for a completed building, not necessarily the first building
If there’s a contract to make repairs or alterations to an existing building, and it is destroyed through no fault of the contractor, why is he excused from performance?
Because it is a basic assumption of the parties that the building will continue to be in existence, so if it is destroyed, the contractor is excused from performance and entitled to recovery of the value of his services and materials
What is the UCC rule for identified goods that get destroyed before the risk of loss passes?
They make the contract void if neither party is responsible
If a person that contracts to give services dies or gets an incapacitating illness, what happens?
That excuses both parties from their duty to perform
What does temporary impracticability do?
It suspends instead of excuses a duty while the impracticability continues, once it is finished, the duty reattaches, but only if the burden isn’t substantially increased on either party.
If an actor contracted to do a movie, but was drafted to war, once the war is over, does his duty reattach?
No, because of the changes in money values and laws, and it would be more burdensome for the parties.
What is subjective impracticability?
The individual person cannot fulfill the contract
What is objective impracticability?
The contract cannot be fulfilled by anyone
Does subjective impracticability count as impracticability?
No, it must be objective to be effective
If a person has assumed the risk or is guilty of contributory fault, can he use impracticability as a defense?
No
If a party was supposed to deliver goods on a certain day, but doesn’t, and then they get destroyed, can he use impracticability as a defense?
No, because of his contributory fault
Who has the burden of proof in an impracticability situation?
The party asserting the defense
What does the UCC say happens if a sole-source is a basic assumption of a contract and it fails?
The seller is excused if the source doesn’t deliver
If an event that is the basis of a claim was reasonably foreseeable, can impracticability be a defense?
No, because a contingency about it should’ve been written into the contract, and not doing that is assumption of the risk.
If you don’t write a clause into a contract stipulating what to do on death or illness, is that assumption of the risk?
No, even though those are foreseeable, they are not included
Why are damages for emotional trauma that comes from a breach not available?
Because those things are too remote to have been in the contemplation of the parties, with the exception of expelling guests from hotels/trains/theaters/funerals etc.
What is frustration of purpose?
- performance of a contract is possible, but
- circumstances arise after formation that are not the fault of either party
- that deprive one party of the benefit from performance
- so that discharges his duty to perform
What are the stipulations in order to have frustration of purpose?
- the other party had to have known what the purpose of the contract was
- the assumption must have been fundamental,
- the frustration must be nearly total
If you lease a building to sell cars, but a war happens and you can’t buy new cars anymore, is your duty excused because of frustration of purpose?
No, because the value of the lease is not totally destroyed, since you can sell used cars or sublet the building
What is the difference between frustration and impracticability?
- frustration: changed circumstances destroy the point of the contract, but it isn’t impossible to perform
- impracticability: changed circumstances make it super hard to perform, but don’t destroy the purpose
Does UCC have frustration of purpose?
No, but it intends for common-law frustration to apply
What is the classic frustration case?
Man paid to use an apartment to watch the king be coronated, but the coronation didn’t happen, even though he could still use the apartment, the point was frustrated
How serious must frustration be in order for it to be a defense?
Substantial. Either total or about 98%
What is temporary frustration?
Creates a prospective inability to perform, and gives the other party the right to suspend performance, or cancel the contract
What are the elements of frustration of purpose?
- reason for entering contract is frustrated by supervening events
- other party contracted for the same reason
- major purpose of contact is totally/nearly totally frustrated
- party claiming defense didn’t assume a greater obligation than law imposes and wasn’t contributorily at fault
