Performance, Breach, and Discharge

Question 1

Discharge

Answer 1

Termination of a contractual duty, and causes a binding promise to cease to be binding

Question 2

Four Types of Discharge

Answer 2

1) Performance
2) Material Breach
3) Agreement
4) Illegality

Question 3

Condition

Answer 3

event whose happening or not happening affects a duty of performance under a contract

Question 4

Express Condition

Answer 4

• explicitly put forth in language

- condition must fully and literally occur

Question 5

Implied In Fact Condition

Answer 5

• inferred from terms of contract, nature of transaction, or conduct of parties
• condition must fully and literally occur

Question 6

Implied in Law Condition

Answer 6

(Constructive Condition)

1) Not contained in language of contract
2) only needs to be substantially performed

Question 7

Condition Concurrent

Answer 7

mutual duties of performance are to take place simultaneously

Question 8

Condition Precedent

Answer 8

event must occur before performance is due

Question 9

Condition Subsequent

Answer 9

an event terminates an existing duty

Question 10

Subjective Satisfaction

Answer 10

relates to a matter of personal taste, opinion or judgement (personal satisfaction need not be reasonable)

Question 11

Objective Satisfaction

Answer 11

relates to mechanical fitness or utility (would a reasonable person be satisfied?)

Question 12

Third Party Satisfaction

Answer 12

When contracting party relies on a third party ‘expert’s’ approval before transferring benefit and carrying out contract

Question 13

Discharge by Performance

Answer 13

Promisor exactly performs duty, thus no longer subject to said duty

Question 14

Substantial Performance

Answer 14

party performs in good faith to best of their ability, not complete but SUBSTANTIALLY clsoe

Question 15

Tender

Answer 15

and offer made by one party to the other to perform his/her obligation

Question 16

Result of a rejected tender?

Answer 16

BREACH

treated as repudiation, excusing tendering party from further duty

Question 17

Material Breach

Answer 17

unjustified failure to perform substantially the obligations promised

Question 18

Breach

Answer 18

wrongful failure to perform contract terms

Question 19

Prevention in Performance

Answer 19

one party’s substantial interference of performance by the other
~~non-breaching party is excused~~

Question 20

Anticipatory Repudiation

Answer 20

notification from one party to the other of his/her intention not to perform and of impeding breach of contract
~~nonbreaching party can sue now or later~~

Question 21

Material Altercation

Answer 21

unauthorized change of any material terms of a written contract ~~discharges entire contract~~

Question 22

Substituted Contract

Answer 22

new contract accepted by both parties in satisfaction of duties in original contract

Question 23

Accord and Satisfaction

Answer 23

tender of lessor performance in full satisfaction of debt in good faith dispute ~~acceptance excuses recovery of full debt~~

Question 24

Novation

Answer 24

all three parties consent to the substitution of one party for one of the original two parties in a contract. the exiting party no longer has any rights or responsibilities

Question 25

Subjective Impossibility

Answer 25

party unable to perform because of financial reasons or incompetence ~~inexcusable from liability for breach~~

Question 26

Objective Impossibility

Answer 26

Situation in which no one could render performance ~~excusable~~

Question 27

Subsequent Illegality

Answer 27

performance is illegal

Question 28

Frustration of Purpose

Answer 28

party’s principal purpose is frustrated by no fault of the party but by occurrence of an event whose nonoccurence was assumed

Question 29

Commercial Impracticability

Answer 29

unjust or unforeseen hardship
performance would cause bankruptcy or sever injury
~~excusable non-performance~~