Performance, Breach, and Discharge

Question 1

Risk of loss

Answer 1

can have carrier and non carrier instances

Question 2

Non Carrier Case

Answer 2

• Seller is a merchant: risk on seller until buyer takes possession
• Seller is a nonmerchant: risk on seller until goods are tendered to buyer

Question 3

Shipment Contract:

Answer 3

*Risk of loss shifts to buyer when goods delivered to CARRIER

Question 4

Destination Contract:

Answer 4

*Risk of loss shifts to buyer when goods delivered to DESTINATION

Question 5

Free On Board:

Answer 5

*FOB SELLER is a Shipment Contract
*FOB “ANYTHING ELSE” is a Destination Contract

Question 6

Requirements Contract

Answer 6

*For a specified period of time, a buyer is contractually obligated to purchase all of a particular set of goods that it requires from the seller.

• An essential element in these agreements is exclusivity. Any agreement that doesn’t expressly obligate a buyer to purchase a specific quantity of particular materials or goods isn’t a requirements contract.

*Key word: good faith

Question 7

Modification

Answer 7

• Common Law: New consideration is needed
• UCC: No new consideration, just good faith needed

Question 8

Oral or Written Modification:

Answer 8

*Can be oral or written
*UCC: Clauses prohibiting oral modifications are valid

Question 8

Mutual Modification:

Answer 8

1) Both parties agree to modify the original terms
2) “Fair and reasonable under circumstances”

Question 9

Contract conditions: types

Answer 9

1. Condition precedent
2. condition concurrent
3. condition subsequent

Question 10

• Condition Precedent:

Answer 10

Delays performance until a specified event occurs, then performance is due

P must prove the event ocurred to prevail

Question 11

Condition Concurrent:

Answer 11

event occurs at time of performance of K

Question 12

• Condition Subsequent

Answer 12

excuses performance once a pecified event occurs

D must prove the event occurred to avoid liability

Question 13

Conditions Excused via:

Answer 13

• Waiver,
• Bad faith, or
• Avoiding forfeiture

Question 14

Time is of the Essence:

Answer 14

• Time is NOT of the Essence unless stated
• If stated, it becomes a condition to the K

Question 15

NON-CONFORMING GOODS - buyers rights

Answer 15

• May reject
• May accept
• May reject in part & accept in part

Question 16

NON-CONFORMING GOODS Seller’s Right to Cure:

Answer 16

1) Seller had reasonable grounds to believe the goods would be acceptable
2) By notice + new tender within time for performance

examples:
o Didn’t you say that you could use number one pencils if you aren’t testing?
o Didn’t you tell me that if I ever had a good deal on peaches to send them?

Question 17

nonconforming goods - installment contract

Answer 17

• Delivering goods in several different
  shipments

Question 18

Non-Conforming Installment Contract:

Answer 18

• Defective shipment cannot be rejected if the defect can be cured

Question 19

Discharge of contract methods:

Answer 19

1. impracticability
2. impossibility
3. frustration of purpose

Question 20

Discharge - Impracticability

Answer 20

• Unforeseen event makes performance too difficult/expensive

Question 21

Impossibility:

Answer 21

• No one can perform

Question 22

Frustration of Purpose

Answer 22

• The core reason for K is no longer present

Question 23

Anticipatory Repudiation:

Answer 23

1) Before contract performance
2) One party UNEQUIVOCALLY refuses to perform

Question 24

Demanding Assurances:

Answer 24

• can Demand when doubtful about performance
• Party must respond in a reasonable amount of time
• UCC: Demand must be in writing

Question 25

Retraction of Repudiation:

Answer 25

Party can retract unless:

• The other party has sued
• The other party has accepted the
  repudiation
• The other party has relied on the repudiation