Performance, Excuse, and Breach Flashcards
What is the basic duty of performance under common law?
to substantially perform all that is called for in the contract
What is the basic duty of performance under Article II?
General requirement of perfect tender (delivery and condition of goods exactly as promised). Also requirement of good faith (“honesty in fact and the observance of reasonable commercial standards of fair dealing”)
What is the seller’s obligation of tender and delivery in non carrier cases?
Proper tender in a non-carrier case means putting and holding conforming goods at buyer’s disposition for a time sufficient for buyer to take possession. Seller must give notice and tender must be at a reasonable hour. Absent agreement otherwise, place of tender is seller’s place of business or residence.
What is the seller’s obligation of tender in shipment contracts?
Absent agreement otherwise – put goods in hands of reasonable carrier and make a contract for delivery; obtain and tender any required documents; promptly notify the buyer of the shipment
What is the seller’s obligation of tender in destination contracts?
Seller must at set destination put and hold conforming goods at buyer’s disposition.
What are the buyer’s payment obligations?
Noncarrier cases – absent agreement otherwise, sale is for cash and price is due at tender
Carrier cases – price due at time and place at which buyer receives the goods (when goods are put in hands of carrier for shipment, when they reach the destination for destination Ks)
Is payment by check sufficient?
Yes, generally, unless seller demands cash and gives the buyer time to get it
What are payment rules for installment contracts?
Seller may demand payment for each installment if the price can be apportioned
What is the buyer’s right of inspection?
Right to inspect goods prior to payment unless contract provides for payment COD (cash on delivery) or no right to inspect
What is a condition?
Either:
(1) an event of state of the world that must occur or fail to occur before a Barty has a duty to perform
(2) event or state of the wold occurrence or nonoccurrence of which releases a party from duty to perform
How is a condition different from a promise?
Condition is a promise modifier. Promises are commitments to do or not do something and may be unconditional. Failure of a condition is not a breach
What are the classifications of condition?
(1) condition precedent – must occur before an absolute duty o immediate performance arises
(2) conditions concurrent – capable of occurring together and parties are bound to perform at the same time (tender of deed in exchange for cash)
(3) condition subsequent – cuts off an already existing absolute duty of performance
What are express conditions?
explicit contractual provisions expressly stating a condition precedent/subsequent
When does promisor’s satisfaction operate as a condition precedent?
Some contracts have an express provision that a party will pay only if satisfied with the other’s performance. Two types:
(1) In contracts involving mechanical fitness, utility or marketability, the condition of satisfaction is fulfilled when performance would satisfy a reasonable person (regardless of whether actual party satisfied).
(2) If the contracts involve personal taste or judgment (like for a portrait), condition of satisfaction fulfilled only by actual satisfaction.
Actual satisfaction is usually the standard applied where the satisfaction is that of a third party. Must be honest/good faith.
What is the effect of a condition meant to benefit only one party?
Where a condition’s purpose is to benefit/protect only one party, the other party’s duty will not be subject to the condition.****GO BACK TO THIS
What is a constructive condition of performance?
Most important/common implied condition – duty of each party to render performance is condition on other party either rendering performance or making a tender
What are the constructive conditions of cooperation and notice?
Cooperation – obligation of one party conditioned on other party’s cooperation in that performance
Notice – often a condition to one party’s performance that the other party notify them that performance is due (esp where party to perform can’t reasonably know of facts triggering performance)
What is the implied order of performance?
Courts can imply constructive conditions about performance timing. If simultaneous performance is possible, they will be deemed constructively concurrent (each a CP to the other). If one performance takes a period of time while the other can be performed instantly, the completion of the longer performance is. a constructive condition precedent to the shorter performance.
When does a duty become absolute?
Condition either performed or legally excused
What is the excuse of condition by hindrance or failure to cooperate?
If the party with a duty of performance subject to a condition wrongfully prevents that condition from occurring, condition is excused
What is the excuse of condition by actual breach?
Actual breach excuses duty of counter performance (if material)
What is anticipatory repudiation?
If there is an executory bilateral contract (performance remaining on both sides), and a promisor unequivocally indicates that they will not or cannot perform in advance of performance being due, the nonrepudiation party can treat this as a breach and sue or treat the contract as discharged.
Can a repudiating party retract the repudiation?
Yes, unless the other party has cancelled, materially changed their position in reliance on repudiation, or otherwise indicated that they view the repudiation as final
What is the excuse of condition by prospective inability or unwillingness to perform?
prospective failure (not unequivocal indication like in anticipatory repudiation) allows the other party to suspend their performance until they obtain adequate assurance of performance. failure to provide these assurances can excuse the innocent party’s performance
What is the excuse of condition by substantial performance?
Substantial performance can be sufficient to trigger the duty of counter performance. This only is applicable if the condition is constructive rather than express. Damages offset allowed
What is the excuse of condition by divisibility of contract?
If a party performs one unit of a divisible contract, they can enforce the contract as to that unit. A contract is divisible if (1) performance divided into 2+ parts, (2) number of parts due from each party is the same, and (3) performance of each part by one party is agreed on as the equivalent of the performance of the corresponding part by the other
What is an estoppel waiver?
Whenever a party indicates waiver of a condition to their benefit (by words or conduct) and the other party detrimentally relies on the waiver, then the courts will hold the waiver binding. (May be retracted at any time prior to reliance)
What is an election waiver?
If a condition does not occur or duty to perform broken, the beneficiary of that condition or duty may either terminate liability or continue under the contract. Choice to continue is considered waiver of the condition/duty and cannot be withdrawn.
