Performance and Breach Flashcards
Contract Performances - Types of performances (6)
1) Full satisfactory
2) Substantial
3) Excusable non-performance (CIISSU)
4) Insecurity and assurance
5) Non performance but: accord/novation/cancellation/waiver/release
6) Breach
Contract Performances - Full satisfactory - Gral
- When all conditions of performance are satisfied
- All parties are discharged from their contractual obligations
- Allows for 3 possible types of conditions to trigger/limit/extinguish duty to perform: a) precedent, b) concurrent, c) subsequent
Contract Performances - Full satisfactory - Types of conditions (3)
1) Precedent 2) Concurrent 3) Subsequent
Contract Performances - Full satisfactory - Condition Precedent - Gral
- Has to occur in order for duty to perform matures - “triggers”
- Can be waived by party or excused by court.
- i.e.: performance when unilateral contract OR obtain approval from party/3rd party (objective/substantive standard test for court to determine approval/rejection)
Contract Performances - Full satisfactory - Condition Precedent - When condition is approval - Standards
1) Objective: reasonable person would approve when involves mechanical utility or operational fitness (i.e. architect certification)
2) Subjective: When approval involves personal taste
Contract Performances - Full satisfactory - Condition Precedent - Timming
- Time of the essence
- small delays not actionable
- If specific time set in contract is usually enforceable
Contract Performances - Full satisfactory - Condition Concurrent - Gral
- Requires both parties to perform promises simultaneously or about the same time
- Can be constructive (created by court) for fairness equity, and even make 1 dependent of the other (hence not enforceable independently)
- i.e.: property sale where deed tendered at time of payment
Contract Performances - Full satisfactory - Condition Subsequent - Gral
- Predefined uncertain future event that DISCHARGES duty to perform by one/both parties
- i.e. lease termination if house used to sell alcohol
Contract Performances - Full satisfactory - Condition Frustration and/or Excuse
- Party cannot intentionally/wrongfully prevent/obstacle occurrence of condition to avoid contractual obligation
- Waiver can be express or implied
- Waiver not revocable once it generated reliance
Contract Performances - Substantial performance - Gral
- UCC: “perfect tender” rule: need perfect performance to avoid forfeiture
- CL: less strict
- OK when minor defect in good faith still generates substantial benefit
- Dx from defect deduced from contract price
Excusable non- performance - Gral
- duty discharged totally/aprtially/temporarily if performance becomes impossible, unduly burdensome BC of event unforeseable at time of contact. - applies in CIISSU situations (cooperation lacking, illegality after formation, incapacity of personal service contractor, source of supply impossible, subject matter distroyed, UCC failure of a presupposed condition)
Excusable non- performance - ClISSU - Cooperation lacking or hindrance
Lack of coop form one party discharges the other party and allows for possible dx recovery
Excusable non- performance - ClISSU - Illegality after formation
Legislation enacted post contract formation
- Discharges both parties
Excusable non- performance - ClISSU - Incapacity of personal service contractor
Death/Incapacity
- only that part is capable to fulfil contract
- parties discharged
Excusable non- performance - ClISSU - Source of Supply Impossible
- When w/o any fault from promisor / contract is discharged
- When source was specific, if not seller must purchase somewhere else to satisfy
Excusable non- performance - ClISSU - Subject Matter destroyed
- aka “Frustration of purpose” / when w/o fault of any of the parties.
- If executory contract - there is no excuse if party can easily find replacement
Excusable non- performance - ClISSU - Subject Matter destroyed - Special rule for contractors
When partially executed contract - Risk of loss usually stays with contractor until completion UNLESS contract only for repairs the contract is discharged and contractor entitled to recovery for value of work to taht point
Excusable non- performance - ClISSU - UCC Failure of Presuposed Condition
- When is commercially impracticable or force majeure then performance is excused (discharge might only be temporary)
- i.e. terrorist attack, fire, war, embargo
- Not foreseable at time of contract + beyond parties control
- Includes government regulation
Excusable non- performance - ClISSU - UCC Failure of Presuposed Condition - Part performance Rule
part performance may stil be required if possible in fair + reasonable manner
- Buyers should be notified of the available quota and expected delay / Buyer’s choice to agree w/quota or to terminate contract if defect substantially impairs value of total contract
Insecurity and assurance of performance - UCC Gral
UCC establishes statutory right to performance security if reasonable grounds for to question other parties willingness/ability to perform
- acceptance of non conforming lot or payment doesn’t prejudice party right for future use
Insecurity and assurance of performance - UCC - Procedure
Party has nto present wirtten demand and other party 30 days to give response with assurance (no specific form of response - just complete communication!!!)
Insecurity and assurance of performance - UCC - Consequences of non compliance
- Contract treated as repudiated + Party asking for assurance can suspend own performance w/o breach. Buyer then entitled to goods only on COD
Non-performance but - gral
When performance is not possible but parties agree on modify or end contract liability by accord/satisfaction, novation, cancellation, waiver, release or promise not to sue, or modification
Non-performance but - Accord and Satisfaction
- Compromise to modify original performance WHEN amount is unliquidated or disputed
- New performance aka “satisfaction”
- Satisfaction discharges obligation form both new and original contract
