Performance, Breach, Discharge

Question 1

Performance (CL)

Answer 1

• one has to substantially perform one’s duties in order for the other’s duty to arise
  -exception = express conditions that must be complied with exactly
  ~ most are constructive conditions = substantial performance is enough

Question 2

Performance (UCC)

Answer 2

• Seller must provide PERFECT TENDER of the goods otherwise Buyer can reject goods
  -if no perfect tender + Buyer rejects = Seller has automatic right to cure ONLY IF:
  ~time left to perform under the K; OR
  ~Seller reasonably believed that Buyer would accept nonconforming foods with or without money allowance aka discount (ex. seller sent better goods than contracted for)
• Exception = installment contracts = Buyer may reject installment if there is a SUBSTANTIAL IMPAIRMENT and the seller cannot cure the installment
• if buyer accepts goods, he may not reject them BUT he can later revoke acceptance —- revocation is higher standard than rejection as it requires showing that the defect substantially impairs the value of the goods to him

Question 3

Delivery Obligations (carrier)

Answer 3

• carrier cases:
  ~ FOB Seller’s Place of Business = seller only has to get the goods to the shipper and risk of loss passes to buyer then (shipment K)
  ~ FOB Buyer’s Place of Business = seller has to get goods to the destination (destination K)

Question 4

Delivery Obligations (non-carrier)

Answer 4

• if seller is merchant = seller must actually deliver the goods to the buyer for ROL to pass
• if seller NOT merchant = seller must tender delivery (i.e. make the goods available) for the ROL to pass

Question 5

Delivery obligations — breach

Answer 5

if the seller is in breach, the ROL is on the seller until the defective goods are cured by the seller or accepted by the buyer

Question 6

Excusing Performance and Conditions

Answer 6

• party excused from performing if the other party breaches
• anticipatory repudiation: when a party unequivocally breaches —> other party can sue immediately, suspend performance and wait to sie, treat K as discharged, or urge party to perform

-prospective inability to perform: when party has reasonably grounds for insecurity that the other will not perform the insecure party can demand adequate assurances that performance will take place

Question 7

Discharging duties

Answer 7

1. occurrence of a condition subsequent = condition that cuts off a duty
2. agreement =
   
   • novation: new party steps into shoes of existing party
   • modification
   • release
   • accord and satisfaction: parties agree to new or different consideration
   • rescission: contract is undone
3. frustration of purpose: primary purpose of K known by both parties at time of contracting is substantially frustrated by an unforeseeable event that occurred after the K was entered into
4. impossibility: an event renders performance impossible that occurs after the K was made, it was not reasonably foreseeable at time of contracting, nonoccurence was a basic assumption of the parties, neither party is at fault, and neither party bears the risk

Question 8

Warranties

Answer 8

1. express: affirmations of fact about the goods or a sample of goods —- CANNOT be disclaimed (puffery does not create this warranty)
2. implied warranty of merchantability: made by merchant and warrants that goods are fit for their ordinary purpose —- CAN be disclaimed (ex. “as is”)
3. implied warranty of fitness: for particular purpose can be made by any seller who knows of buyer’s specific purpose and the buyer relies on the seller — CAN be disclaimed (seller does not need to be merchant)
4. limitation of remedies clause: provision that limits/controls remedies —- enforceable unless it is unconscionable or it fails of its essential purpose
   ~ unconscionable if it attempts to limit/avoid paying consequential damages for a personal injury due to a consumer product