Performance and Excuse of Nonperformance

Question 1

Performance under common law

Answer 1

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.

Question 2

Performance under UCC Rule

Answer 2

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.

Question 3

Installment Contracts and Performance

Answer 3

Requires delivery of goods in separate installments over specified period.

No perfect tender rule. It’s about SUBSTANTIAL IMPAIRMENT.

Question 4

Buyer’s acceptance of the goods (and implied acceptance)

Answer 4

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.

Question 5

Buyer’s obligations to pay

Answer 5

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.

Question 6

Conditions (and express conditions)

Answer 6

Limits obligations created by contract language. DO NOT create own independent obligations. Are NOT promises.

Express conditions: must be PERFECTLY satisfied

Question 7

Satisfaction Conditions

Answer 7

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

Question 8

Express conditions Precedent

Answer 8

Performance not due until event occursC

Question 9

Conditions subsequent

Answer 9

Events after performance that could terminate duty to pay

Question 10

Doctrines that excuse conditions/

Answer 10

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

Question 11

Failure to Cooperate (conditions)

Answer 11

condition not satisfied b/c action/inaction of protected person

Question 12

Waiver of condition

Answer 12

Voluntary giving up of condition’s protection
-can retract waiver if other party hasn’t relied on it yet

Question 13

Anticipatory Repudiation

Answer 13

Early statement of non-performance.

Provides excuse unless retracted. Repudiations can be retracted if not relied on yet.

Question 14

Failure to give adequate assurance

Answer 14

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.

Question 15

Recissions

Answer 15

Party’s mutual agreement to cancel K. To be effective, both party’s miust have some performance left remaining.

Question 15

Later Agreements that are formed that might excuse original party’s obligations

Answer 15

1) Recission
2) Modification
3) Accord and Satisfaction
4) Novaction

Question 16

Modfication

Answer 16

Replaces existing K terms with new terms immedtialy

Distinguish from A&S: Original duty immeditatly replaced

Question 17

Accord and Satisfaction

Answer 17

Agreement to accept DIFFERENT performance to satisfy existing duty

Distinguished from modification: Original duty doesn’t get excused until accord is actually satisfied

Question 18

Novation

Answer 18

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.

Question 19

Later events that excuse performance

Answer 19

1) Impossibility/Impracticability
2) Death or incapacity
3) Frustration of Purpose

Question 20

Death or incapacity of special person

Answer 20

(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)

Question 21

Impossibility/Impracticability

Answer 21

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

Question 22

UCC Risk of Loss and Impracticability

Answer 22

Impracticability superscedes

Question 23

Frustration of Purpose

Answer 23

Not impossible but

1) Both parties understood the central purpose
2) PErformance excused if K’s essential purpose is undermined