Performance, Breach, and Discharge Flashcards
A) Risk of Loss
Non-Carrier Case
Carrier Cases
1) Non-Carrier Case:
(a) Seller is a merchant: Risk on seller until the buyer takes possession
(b) Seller is not a merchant: risk on seller until goods are tendered to buyer
(i) Made available to the buyer?
2) Carrier Cases
(a) Shipment Contract:
(i) Risk of Loss shifts to buyer when goods delivered to CARRIRER (USPS, FedEx)
(b) Destination Contracts
(i) Risk of Loss shifts to the buyer when goods are delivered to a DESTINATION
(c) FOB
(i) FOB Seller: is a SHIPMENT Contract
(ii) FOB “Anything else:” is a DESTINATION Contract
(a) Shipment Contract:
(i) Risk of Loss shifts to buyer when goods delivered to CARRIRER (USPS, FedEx)
(b) Destination Contracts
(i) Risk of Loss shifts to the buyer when goods are delivered to a DESTINATION
(c) FOB
(i) FOB Seller: is a SHIPMENT Contract
(ii) FOB “Anything else:” is a DESTINATION Contract
C) Modification Rules
(i) Common Law Modification: New Consideration is needed
(ii) UCC Modification: Good Faith is Needed, no new consideration
(i) Common Law Modification
New Consideration is needed
(ii) UCC Modification
Good Faith is Needed, no new consideration
(b) UCC: Clauses prohibiting oral modifications are valid
3) Mutual Modification
(a) Ok if both parties agree to modify the original terms +
(b) “fair and reasonable under the circumstances”
2) Conditions Excused
(a) Waiver
(b) Bad Faith
(c) Avoiding Forfeiture
E) Non-Conforming Goods - UCC - Buyer
(a) May Reject All within a reasonable amount of time
(b) May Accept All
(c) May Reject in part and Accept in part
UCC Seller’s Right to Cure
(a) Seller had reasonable grounds to believe the goods would be acceptable
(b) By notice + new tender within time of performance
4) Non-Conforming Installment contact
(a) Defective shipment cannot be rejected if the defect can be cured
(i) One non-conforming shipment does not mean total breach of the Contract
(ii) If 1 installment impairs the value of the entire contract, buyer can go after the entire contract
F) Discharge
Impracticability
Impossibility
Frustration of Purpose
1) Impracticability
(a) Unforeseen event makes performance too difficult/expensive
(i) Can discharge
(ii) Some increase in price is not enough though
2) Impossibility
(a) No one can perform
(b) (Temporary difficulty is not enough)
(c) Ex. All the raw materials are gone
(i) Illegality of performance
3) Frustration of Purpose
(a) If the core reason for the contract in now gone, it is dischargeable
1) Anticipatory Repudiation
(a) Before Contract performance
(b) One party UNEQUIVICALLY refuses to perform
Assurances
(a) Demand when doubtful about performance
(b) Party must respond with a reasonable amount of time – ~ 30 days
(i) UCC: Demand must be in writing
3) Retraction of Repudiation, party can retract unless
(a) The other party has sued
(b) The other party has accepted the repudiation
(c) The other party has relied on the repudiation
