Performance and Excuse of Nonperformance Flashcards
Performance under common law
Performance doesn’t need to be perfect. Substantial performance is enough, ie meets contract’s essential purpose.
Material breach is not okay. Will excuse the innocent parties obligations.
Performance under UCC Rule
Perfect Tender Rule: Seller’s delivery must be perfect. Perfect goods, right place, right time. If not perfect, buyer has right to reject all goods.
Installment Contracts and Performance
Requires delivery of goods in separate installments over specified period.
No perfect tender rule. It’s about SUBSTANTIAL IMPAIRMENT.
Buyer’s acceptance of the goods (and implied acceptance)
Buyer is owed a reasonable oppurtunity to inspect the goods. Paying in advance is not acceptance.
Can be implied acceptance if enough time goes buy, even if not actually inspected.
Buyer’s obligations to pay
Payment terms.
1) Cash is king
2) Checks can be okay, but seller has right to refuse. Rejection gives buyer additional reasonable time to come up with cash. Not in breach immediately.
Conditions (and express conditions)
Limits obligations created by contract language. DO NOT create own independent obligations. Are NOT promises.
Express conditions: must be PERFECTLY satisfied
Satisfaction Conditions
Ex: I will pay you X if I am satisfied
Satisfaction measured by reasonable person standard unless:
1) K deals with art or personal taste
Express conditions Precedent
Performance not due until event occursC
Conditions subsequent
Events after performance that could terminate duty to pay
Doctrines that excuse conditions/
Conditions may be excused by action or inaction of person protected by condition.
Ask who is protected by the condition, and if she did something to forfeit that protection
1) Failure to cooperate
2) Waiver of condition
3) Anticipatory Repudiation
4) Failure to give adequate assurance
Failure to Cooperate (conditions)
condition not satisfied b/c action/inaction of protected person
Waiver of condition
Voluntary giving up of condition’s protection
-can retract waiver if other party hasn’t relied on it yet
Anticipatory Repudiation
Early statement of non-performance.
Provides excuse unless retracted. Repudiations can be retracted if not relied on yet.
Failure to give adequate assurance
A party with reasoanble grounds to being insecure about the other party’s performance may, in writing, request adequate assurance that other party will perfrom in accordance with contract.
Assurance not recieved = anticipatory repudiation
BUT cannot use to rewrite contract or demand certain assurance. Only entitled to ADEQUATE assurance.
Recissions
Party’s mutual agreement to cancel K. To be effective, both party’s miust have some performance left remaining.
Later Agreements that are formed that might excuse original party’s obligations
1) Recission
2) Modification
3) Accord and Satisfaction
4) Novaction
Modfication
Replaces existing K terms with new terms immedtialy
Distinguish from A&S: Original duty immeditatly replaced
Accord and Satisfaction
Agreement to accept DIFFERENT performance to satisfy existing duty
Distinguished from modification: Original duty doesn’t get excused until accord is actually satisfied
Novation
Agreement to substitute new party for existing party.
Person who owed duty is replaced with someone else. Both original parties must agree.
DELEGATION is not novation.
Later events that excuse performance
1) Impossibility/Impracticability
2) Death or incapacity
3) Frustration of Purpose
Death or incapacity of special person
(must be essential/special person in K.)
-(Van Gogh painting a portrait vs a barn)
-(person who owes money dies - K just goes to estate)
Impossibility/Impracticability
1) unforseen future event;
2) new government regulation making performance illegal;
3) destruction of contract’s subject matter
Increase of cost is not an excuse
UCC Risk of Loss and Impracticability
Impracticability superscedes
Frustration of Purpose
Not impossible but
1) Both parties understood the central purpose
2) PErformance excused if K’s essential purpose is undermined
