Performance & Breach (CH7) Flashcards
express conditions
= can manipulate the timing of obligations in a contract
- if performance is subject to a condition =/= no obligation to perform until condition is met
Key: when there is an express condition parties can be “nitpick” the terms = must adhere to specific terms - no excuse or alternatives
see, interpretational rules
interpretational rules (for express conditions)
= require parties to clarify if express conditions will be invoked
Key: problems arise when one party has performed but the other party’s performance is excused bc of the non-occurrence of a condition
When is a party in breach of the contract?
-they incurred an obligation to perform
- failed to perform in some material respect
or failed to give reasonable basis for non-performance
Constructive Conditions
= Court made conditions
Key: when K is not written in terms of express conditions
- Courts may imply conditions in order to assure that certain obligations are performed in a particular order or mitigate other factors
Mitigating doctrines (for express / constructive conditions)
= alleviate the impact of conditions
Key: generally apply to both express and constructive conditions
except: in the case of Substantial Performance, that only applies to express conditions
- disproportionate forfeiture
- divisibility
- restitution
- Waiver
- Estoppel
- Election
- Substantial Performance (precluding nitpicking, only applies constructive conditions)
- Prevention?
Key: when express/constructive conditions result in harsh results if a party subject to the condition has expended substantial resources and the condition does not occur
Restatement 244 - CONDITION
= an event not certain to occur
- which must occur
- unless it is excused
-before an obligation under a contract becomes due
Key: the condition may be an event
- that one of the parties can cause (ex. sending notice) OR
- which is not within the control of either party (ex. getting approved for a loan)
difference between a condition and a duty
duty = violation amounts to breach of contract
condition = violation of makes contract void (non-performance form other party is justified)
breach of duty
= failure to perform a duty
Key: gives rise to a breach of K cause of action but does not (necessarily) excuse performance
key:
- failure of condition does excuse performance
- material breach will excuse performance too
- minimal breach does not excuse performance
failure of condition
= failure to perform a condition
Key: does excuse other party from their obligation of performance
“IF AND ONLY IF”
language that is indicative of a condition
Key: words that indicate a limitation
Also:
- subject to
- Is a condition to
forfeiture
= when the condition doesn’t occur everything goes to waste
Key: if the clause is ambiguous the ct. will likely rule it a duty and not a condition - to prevent wasted resources
Restatement 229
Excuse a Condition to Avoid Forfeiture
= Allows courts to SET ASIDE an EXPLICIT CONDITION
- unless its occurrence was material
-to avoid “DISPROPORTIONATE FORFEITURE”
If the clause is ambiguous, why does the court read it as a duty and not a condition?
rational = to prevent forfeiture
see, how does the court determine whether the clause is ambiguous?
How does the court determine whether the clause is ambiguous?
Key: Language indicative of a condition
- “if and only if”
- subject to
- Is a condition to
constructive conditions (of exchange)
=each party’s promise = “constructive condition” of the other party’s performance
“an exchange of promises renders the promised performances as dependent”
Key: You must perform / be ready, willing, & able to do so before you can prevail in a lawsuit
Holmes on Implied Conditions
you can always imply a condition
? “bc some matters cannot by nature be quantitatively measured - and therefore no exact logical conclusions can be found”
Merger Clause
= provision that states that the terms of a contract are the complete and final agreement between the parties
concurrent conditions
= where 2 concurrent acts are to be done
Tender
= an offer to do/perform an act
- the party offering is bound to perform to the party to whom the offer is made
What happens when a K is clear and there will be an actual forfeiture if the condition is enforced?
Key: “Like nature abhors a vacuums, courts ashore forfeiture”
R229 = the court will set aside an explicit condition to avoid “disproportionate forfeiture”
if an alleged agreement is made before a K is executed, can a party be entitled to withhold performance if not compensated in accordance to the alleged agreement?
What would be the impact of a merger clause?
if an alleged agreement was made after the K was entered into, what would be the consideration for that agreement?
What would be the impact of a no oral modification clause?
The Perfect TENDER Rule
= if the goods do not match the contract terms exactly, the buyer may
- reject the goods
- & sue for breach
Key: “the substantial performance doctrine does not apply to the sale of goods”
= if a discrepancy does not come to a buyer’s attention until after the goods have been accepted, - the buyer may sue for damages
- resulting form the deviation (“between the goods as promised and the goods as good”)
How does the perfect tender rule affect the legality of the non-breaching party response to a breach of K?
