performance and discharge

Question 1

party fullfills

Answer 1

a party fulfills (discharges) its duties by performing as required by the contract

Question 2

conditions:

Answer 2

performance is required if condition is triggered; otherwise duty to perform is discharged

a. condition precedent: must be fulfilled before a party can be required to perform ex. contract will be binding only if my attorney approves it
b. condition subsequent: after a party has begun to perform, a condition that must be met before the party must continue. ex. have to pass bar exam after being hired by law firm

Question 3

concurrent conditions

Answer 3

each party’s duty to perform is conditioned on the other party’s simultaneous performance. have $ and pen ready

Question 4

express condition

Answer 4

stated verbally or in writing in the agreement

Question 5

implied in fact condition

Answer 5

tacitly understood to be part of the agreement

ex. builder will fix warranted items in new house, but homeowner must notify builder of problem

Question 6

implied in law condition

Answer 6

court-imposed condition to ensure fairness (not express or implied from facts)
ex. Barry gave Robyn engagement ring, when she refused to sign a prenup they ended the engagement, Barry sued to get the ring back. Implied condition that she would marry him in exchange for an engagement ring

Question 7

performance

Answer 7

usually the duty to perform under a contract is absolute

Question 8

complete performance

Answer 8

when a party performs exactly as agreed

Question 9

substantial performance

Answer 9

when a party in good faith substantially performs the terms of the contract. Failure to fully perform results in a minor breach (nonmaterial )
1. whether performance is substantial depends on the specified facts. did the other party get the “important and essential benefits of the contract?”- did they get the consideration they were promised?
2. if the breach is minor, the non breaching party can seek damages from the breach, but is not excused from performing himself
ex. Kent hired jacobs to build his house. the contract specified the house would have reading pipes, jacob could not find reading pipes but used a comparable brand instead. Kent refused to pay the contract amount for the house.
Did they in good faith do substantially what they promised? yes but not exactly the same brand

Question 10

material breach

Answer 10

a substantial failure to perform as promised, such that the other party is not getting the consideration he/she bargained for
1. the non-breaching party is excused from performing and can sue for damages caused by the material breach

Question 11

anticipatory repudiation

Answer 11

the refusal of one party to perform before performance is required - in advance
-the non breaching party can treat the repudiation immediately as a material breach and is excused from performing
why dont the courts make the non-breacher wait until the specified time of performance before seeking relief? puts you in bad position, could be worthless on Friday

Question 12

discharge by law

Answer 12

where the law automatically discharges the parties

Question 13

impossibility

Answer 13

objective impossibility: when it is impossible for anyone to perform as required (not just impossible for the obligor), duty to perform is discharged

ex. when a party who was supposed to perform a personal service dies/becomes incapacitated - estate is discharged, no one could paint portrait like picasso
- when the subject matter of the contract is destroyed - selling your minivan but it gets destroyed, discharged bc car no longer exists
- when a change in the law makes performing illegal

Question 14

commercial impracticibility

Answer 14

a party might be excused from performing if it gets extremely difficult or expensive

• the difficulty or added expense can’t be foreseeable at all when the parties formed the contract. why not? took a risk, should we allow loss to be shifted? if you can see it you can contract around it
• super sidewalk, asked to modify contract b/c of unforeseen difficulties

Question 15

statute of limitations

Answer 15

expiration date on lawsuits.
does not technically discharge the duty to perform, but prevents the obligee from enforcing the contract
-duty to perform can be revived if obligor promises to perform after statute has run
-agree to sell pen, sarah breaches, obligation to pay dollar, s of l passes, sarah free and clear can’t sue her, wants to pay dollar now so you can sue

Question 16

bankruptcy

Answer 16

the court distributes all of the bankrupt person’s assets equitably among the person’s creditors, and then discharge remainder of the person’s debts
-partial payment after a discharge in bankruptcy will not revive the debt

Question 17

discharge by agreement

Answer 17

parties enter into a new agreement which discharges their obligations under the old agreement

• in an accord and satisfaction, the parties make a new agreement (the accord) that a new act (the satisfaction) will discharge an existing contract duty.
• confused about who owes money, made accord that you owe a, other dispute is discharged