Performance, Breach and discharge Flashcards
An heir hired an appraiser to appraise various items of personal property that she had inherited, including an original oil painting. The appraiser told the heir that he had no expertise in appraising art and recommended that she hire an art appraiser to value the painting. The heir, doubting that the painting was valuable, declined to follow the appraiser’s advice and decided to sell the painting at a yard sale. She set the price at $100, assuming that this price reflected the painting’s approximate value. A neighbor who knew nothing about art, purchased the painting from the heir at the asking price. The neighbor and the heir later discovered that the painting was worth over $900,000.
Would the heir be likely to prevail in an action to rescind the contract?
No, b/c the heir bore the risk of any mistake as to the true value of the painting.
A person cannot avoid a contract for mutual mistake where that person bears the risk of mistake. Here, the heir bore the risk. She was aware that she had only limited knowledge with respect to the facts, but she treated her limited knowledge as a sufficient basis for determining the value of the painting.
Rescission is available only when the non-mistaken party knows or should have known about the unilateral mistake. Here, the neighbor knew nothing about art and therefore could not have known about the value. it was the heir who bore the risk of mistake, as she treated her limited knowledge as sufficient. Mutual mistake is not a defense when the part who is mistaken bore the risk of the mistake.
An engineer and a real estate developer entered into a written professional-services contract. The K stated that in return for $10,000, the engineer was to “complete feasibility study and a master plan, and use best efforts to obtain county approval of the [developer’s planned] project.”
The engineer submitted a completed feasibility study and master plan to the developer. Despite the engineer’s best efforts, however, the county did not approve the project. B/c of this outcome, the developer refused to pay the engineer for any of the engineer’s services
In a breach of contract action by the engineer against the developer, which party will likely prevail?
the engineer, b/c the developer breached the contract by not paying once the developer’s obligation to pay the engineer became due.
The engineer’s obligation was to use best effort to obtain county approval, not to necessarily succeed in obtaining county approval. the engineer performed all obligations as promised. Therefore, the developer breached the Contract by refusing to perform its obligation to pay the engineer.
Under the rule of constructive conditions of exchange, the performance by one party is an implied condition of performance by the other party. since the engineer performed all contractual obligation as promised, the developer breached by refusing to perform its contractual obligation to pay the engineer. There is no express condition.
On March 1, an owner entered into a written contract to sell her car to a buyer for $15,000, with delivery and payment to occur on March 6. The buyer had previously declined to enter into an option contract to hold the owner’s offer open until March 6. On March 3, the buyer emailed the owner to say that he might not have the $15,000 by March 6. The owner did not respond. On March 4, the owner sold the car to her neighbor for $13,000 and told the buyer that she planned to sue him for breach of contract to recover the difference in the purchase price.
Is the owner likely to succeed in a breach of contract action?
No, b/c the owner anticipatorily repudiated her Contract with the buyer.
Anticipatory repudiation requires: (1) an overt communication of an intention not to perform a contractual obligation or (2) an action that renders performance impossible or shows a party’s determination not to perform. UCC § 2-610, cmt. 1. Here, the buyer did not anticipatorily repudiate because he merely said that he “might not” have the money to complete the transaction on March 6. Therefore, the owner anticipatorily repudiated by selling the car to the neighbor and will not succeed in a claim against the buyer for breach of contract.
