Performance Flashcards
A breaching party who is adversely affected by a mistake may avoid performance if at least one of the parties held an erroneous belief that was not in accordance with the facts or the law at the time of contract
Mistake
What is a mistake?
Belief not in accordance with facts at time of contract, including law
three elements for mutual mistake
- basic assumption
- material effect on exchange
- Affected party bears no risk
three ways in which party may bear the risk of mistake:
- Allocation by party agreement
- Allocation by court
- Conscious ignorance
When both parties enter into the contract based on the same mistake
mutual mistake
Unilateral Mistake Elements
- Basic assumption;
- Material effect on exchange;
- Affected/mistaken party; bears no risk;
- Unconscionability, knowledge or fault
What are the two types of mistake?
unilateral and mutual
What is changed circumstances?
a breaching party may avoid performance if the circumstances change such that performance is impossible or impracticable or the principal purpose of the contract is substantially frustrated
the impracticability standard of changed circumstances means
extreme and unreasonable burden
Frustration of purpose standard of changed circumstances
a party’s principal purpose is substantially frustrated if the other party’s performance has become virtually worthless, regardless of whether it is possible or practicable
The Perfect Tender Rule provides that
all goods, including the delivery of those goods, must conform to the contract in every respect
A buyer may revoke acceptance in these situations
reasonable assumption of cure
difficulty of discovery
seller’s assurances
If the breaching party has already rendered part performance, then the injured party is entitled to a remedy only if there is a
material breach
If the breaching party has rendered no performance or made an aniticpaptory repudiation, then the injured party is
entitled to a remedy in court
The materiality of a breach is generally based on a consideration of these significant circumstances:
loss of benefit to the injured party
adequacy and extent of compensation to injured party
disproportionate forfeiture by the breaching party
likelihood of cure by the breaching party
absence of good faith or fair dealing by breaching party
What does the common law doctrine of substantial performance say?
a breach is immaterial if the breaching party has rendered a good faith performance that is substantially similar to what was promised in the contract
A _________ may take the form of a statement that clearly indicates an intent to breach (not just a mere expression of doubt) or a voluntary, affirmative act that renders a party unable to perform
anticipatory repudiation
An anticipatory repudiation may be _____ before it becomes final
retracted
An anticipatory repudiation is retracted if
the injured party receives notice that full performance will be rendered or knows that the events causing the repudiation have ceased to exist
An anticipatory repudiation is final if
the injured party has materially changed position in reliance on the repudiation or has indicated that the repudiation is considered final
A party may suspend performance and demand _______ ____ if there are reasonable grounds to believe that the other party will commit a breach
adequate assurance
