Performance and Excuse of Nonperformance (Module 6)

Question 1

Performance of K Requirements (UCC and Common Law)

Answer 1

UCC - perfect tender (seller delivers perfect goods at perfect time and perfect place or buyer can reject everything)

Common law - substantial performance (of all the essential terms)

Question 2

Seller Obligation of Tender/Delivery (Noncarrier) (UCC)

Answer 2

Tender - must give buyer notice rxbly necessary to enable buyer to take possession at a rxble hour

Place of Delivery - unless otherwise specificed, buyer picks up at seller’s place of business

Question 3

Shipment Contracts (Carriers) (UCC)

Answer 3

If parties agreed to use a carrier either in express terms or due to circumstances, seller’s obligations in a shipment K are:

1. Contract with a rxble carrier to transport
2. Include any documents nec for buyer to take possession
3. Promptly notify buyer it’s shipped

Don’t need to make sure the goods actually reach the buyer

Buyer must pay when the goods are shipped (still has right to inspect)

Question 4

Destination Contracts (Carriers) (UCC)

Answer 4

Seller agreed to tender at a particular destination (like buyer’s warehouse) so the seller must put/hold the goods at that destination

Buyer must pay when the good reach the destination (still has right to inspect)

Question 5

Buyer Obligation to Pay (Noncarrier) (UCC)

Answer 5

Unless K provides otherwise, in a noncarrier case sale is for cash and the price is due with tender of delivery

Question 6

Installment Contract Payment (UCC)

Answer 6

Seller may demand payment for each installment if the price can be apportioned, unles there is a contrary intent

A buyer may declare a total breach of an installment contract only if the defect substantially impairs the value of the entire contract

Question 7

Buyer’s Right of Inspection (UCC)

Answer 7

Buyer has right to inspect goods before they pay unless otherwise indicated that they promised to pay without inspection

Question 8

Conditions v. Promises (UCC Performance)

Answer 8

Promise - commitment to do/refrain from doing something; if unconditional, then contract is breached upon failure to perform

Condition - a “promise modifier”; an event/state of the world must occur before the party has a duty to perform, or, that event occurring could release them from duty to perform
Failure of a condition is does not have to be a total breach; non-failing party just doesn’t have to perform and can likely recover under unjust enrichment if partially performed

Question 9

Effect of Contract Conditions on Party’s Performance (Review Chart)

Answer 9

Question 10

Promisor’s Satisfaction as a Condition Precedent (Performance of Ks)

Answer 10

Express condition that promisor doesn’t have to pay if not satisfied

If K involves mechanical fitness, utility, or marketability: satisfy a rxble person

If K invovles personal taste/judgement it’s personal satisfaction
* can be based of 3rd party taste as well

Question 11

Condition Precedent (Contract Performance)

Answer 11

Condition must occur before performance is due; once it occurs, party is obligated to perform

Question 12

Conditions Concurrent (Contract Performance)

Answer 12

Conditions to occur at the same time; if one oconditions has occurred the performance of the other is due

ex. Agreement to pay $100 for land; money and deed exchanged in same transaction

Question 13

Conditions Subsequent (Contract Performance)

Answer 13

Occurrence of the condition cuts off already existing duty and duty to perform is excused

Question 14

Events that Excuse Performance of Conditional Promise

Answer 14

Excuse of condition by:
1. Hindrance/failure to cooperate
2. Waiver or Estoppel
3. Actual breach
4. Anticipatory Repudiation
5. Prospective inability/unwillingness to perform
6. Substantial performance
7. Divisibility of contract
8. Impossibility, impracticability, frustration

Question 15

Hindrance/Failure to Cooperate
(Conditional Performance Excused)

Answer 15

If the party protected by the condition wrongfully prevents the condition from occurring it will excuse other party’s performance/ could be breach (I think)

Ex. A agrees to buy B’s house if she can get a mortgage at a certain rate; she makes no effort to get a mortgage, then claims she’s excused from perofrming bc condition wasn’t met; she has breached

Question 16

Excuse of Condition by Waiver or Estoppel

Answer 16

Waiving a condition that goes to the main purpose/heart of the contract requires consideration!
- waiver of a condition only severs the right to treat the failure of the condition as a total breach excusing counterperformace; waiving party is still entitled to damages
- conditions for collateral matters being waived do not need consideration

Waiver by Election or Estoppel
- The person who has the benefit of the condition under the K can indicate by words or conduct (continuing performance despite burdened party not meeting condition) that they won’t enforce the conidition; no consideration on burdened party’s behalf needed
- Estoppel will be if the other party detrimentally relied on the waiver

Honestly this whole section is a cluster fuck i didn’t write down a decent portion of it bc im wasting too much time

Question 17

Anticipatory Repudiation

Answer 17

Party gives notice that they indicates they won’t be able to perform when time comes; must be unequivocal in stating they can/will not perform

Nonrepudiating party has four options:
1) treat as total breach and sue
2) stop their own performance
3) treat as offer to rescind and consider the K discharged
4) ignore and urge the promisor to perform (but can still do any of the other things unless party retracts repudiation)

Question 18

Retraction of Repudiation

Answer 18

Repudiating party can retract if the other party hasn’t cancelled, materially changed position, or indicated they view the repudiation as final

Question 19

Excuse of Condition by Prospective Inability/Unwillingness to Perform

Answer 19

Non-breaching party has reason to think the other party won’t perform
- they have to reach out and get adequate assurances that performance will happen
- if they don’t get adequate assurance, can treat as repudiation

Question 20

Excuse of Condition by Substantial Performance

Answer 20

It’s on page 79 i have no fucking idea what it apaplies to or wtf any of this section is saying

Question 21

Excuse of Condition by Divisibility of K

Answer 21

If K is divisble and a party performs one aspect, they are entitled to the equivalent of that aspect even if they fail to perform other aspects

All three of these must be met for a K to be divisible:
1) performance of each party is divided into two or more parts
2) equal amount of parts on each side
3) each performance is the quid pro quo of hte other

Question 22

Discharge of Performance - Full Performance, Condition Subsequent, Illegality

Answer 22

1. Most obvious way is by by full and complete performance
2. Illegality - if subject matter is now illegal due to subsequent law then performance is discharged (if it was already illegal at time it was made then there never was a K in teh first place)
3. Condition Subsequent - when the condition occurs discharges duties

Question 23

Discharge of Performance by Mutual Recission

Answer 23

Express agreement by both parties to rescind (note: if 3rd party beneficiary rights have already vested it cannot be discharged)

In CL K’s recission can be always be oral, for UCC/SOF it must be in writing

Unilateral K’s
- if offeree already performed, but both parties want to rescind (for whatever dumb ass reason) offeree either needs to be given either prom estoppel, new consideration, or they can say that it was a gift and don’t worry about it

Bilateral K’s
- even if partial perforamnce has happened can usually still mutually rescind

Question 24

Partial Discharge of Performance by Modification

Answer 24

It discharges the original terms that are the subject of the modification, not the whole thing

CL - requires mutual assent & consideration
UCC - no consideration as long as modification is in good faith

Question 25

Discharge of Performance by Release

Answer 25

A release and/or K not to sue discharges contractual duties; the release or K must be in writing and supported by new consideration or promissory estoppel elements

Question 26

Discharge of Performance by Substituted K

Answer 26

When parties enter into a second contract that immediately revokes the first K either impliedly or expressly; intent will be what governs

Question 27

Discharge of Performance by Accord & Satisfaction

Answer 27

Accord: one party to the original K accepts, in lieu of original performance, some other different future performance (ex. instead of the $50 you owe me for this, you can give me 10 apples); must be supported by consideration
- a debtor’s offer to make partial payment will suffice if there is a “bona fide dispute” on the underlying claim

Satisfcation: completion of the accord agreement; only after satisfaction has occurred will the original duty be discharged

Question 28

Breach of an Accord/Satisfaction Agreement

Answer 28

Breach by Debtor: creditor can go after them either for the original agreement or the accord

Breach by Creditor: would be breach if htey sue them on the original K; debtor can either:
- raise accord degreement as equitable defense and ask action be dismissed
- lose the suit and then sue creditor for breach of the accord agreement

Question 29

Accord v. Modifcation of K

Answer 29

In an accord, the original K is “suspended” until the accord is satisfied; if it’s not satisfied, the original K is still enforceable

In a modification, the duties of the parties change immediately and the terms of the original K can no longer be enforced

Question 30

Discharge of Performance by Novation

Answer 30

1) a previous valid K
2) agreement bt all parties (including new one) to the new K
3) immediate extinguishment of contractual duties bt the original parties
4) a valid and enforceable new K

Distinguish a delegation, which is when in A/B contract, A has C perform for them without B’s consent; A is still liable to B, but in a novation any obligation to A is discharged

Question 31

Discharge of Performance by Impossibility

Answer 31

Impossibility
- Nonoccurence of the event was a basic assumption of both parties
- Impossibility means the duties could not have been performed by anyone
- Each party will be excused from duties that are yet to be fulfilled

Partial Impossibility
- duty may be discharged only to the extent that the K is impossible, remainder is still required (even if doing so will now be more expensive/difficult)

Temporary Impossibility
- suspends contractual duties, they “spring back” into existence when it becomes possible again

Question 32

Specific Impossibility Situations Discharging Performance

Answer 32

• Death/Physical Incapacity (only if it’s a person necessary to effectuate the K)
• Supervening Illegality
• Subsequent Destruction of K’s Subject Matter
• Contracts to Build are NOT discharged by destruction of WIP bc they can still rebuild; but can have deadline extended if no fault of their own (I don’t think they get any more $ either)

Question 33

Discharge of Performance by Impracticability

Answer 33

1) extreme and unrxble difficulty and/or expense
2) nonoccurrence basic assumptoin of both parties

UCC specific
- same test as above; seller will be discharged to extent of the impossibility/impracticability (even if risk of loss was on seller)
- shortage of raw materials due to things like war/embargo/unforeseen shutdown of major supplier all will excuse performace, but mere increase in cost won’t count unless it’s 50%+
- if seller is partially unable to perform due to unFOS circumstances, they must allocate deiveries among their customers

Question 34

Discharge by of Performance by Frustration

Answer 34

Exists if the purpose of the K has becomes valueless bc of a supervening event not by the fault of the party seeking discharge

Elements necessary to establish:
1) supervening act
2) not rxbly fos
3) purpose of K has become completely/almost completely destroyed
4) purpose of the K was known to both parties when they entered (case where rented apartment to watch the parade)

Question 35

Discharge of Performance by Account Stated

Answer 35

“Account stated” is a K where parties agree to an amount as a final balance due from one to the other; that final balance encompasses a number of transactions bt the parties and merges all of them by discharging the amount owed

Question 36

Disharge of Performance by Lapse

Answer 36

If duty of each party is a condition concurrent and neither performs on day set, neither is in breach and obligations lapse; if “time is of the essence” lapse is immediate, otherwise it’s after rxble time

Question 37

Effect of Running of SOL on Contract Performance

Answer 37

This only bars judicial remedies for breach, it does not discharge duties;