PERFORMANCE- How Are the Terms of a Contract Satisfied?

Question 1

An event that is not certain to occur

Answer 1

Condition

Question 2

An event that triggers a contractual duty

Answer 2

Condition Precedent

Question 3

An event that terminates a contractual duty

Answer 3

Condition Subsequent

Question 4

When it is a condition of an obligor’s duty that he be satisfied with respect to the obligee’s performance or with respect to something else, and it is practicable to determine whether a reasonable person in the position of the obligor would be satisfied, and interpretation is preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied

Answer 4

RST 2d § 228

Question 5

Performance of a duty subject to condition cannot become due unless the condition occurs or its nonoccurrence is excused

Answer 5

RST 2d § 225

Question 6

Unless it has been excused, the nonoccurrence of a condition discharges the duty when the condition can no longer occur

Answer 6

RST 2d § 225

Question 7

Non-occurence of a condition is not a breach by a party unless he is under a duty that the condition occur

Answer 7

RST 2d § 225

Question 8

To the extent that the nonoccurrence of a condition would cause disproportionate forfeiture, a court may excuse the nonoccurrence of that condition unless its occurrence was a part of the agreed exchange

Answer 8

RST 2d § 229 and JNA Realty

Question 9

In determining whether a failure to render or to offer performance is material the following circumstances are significant:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected

(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived
(c) the extent to which the party failing to perform or to offer to perform will suffer a forfeiture
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing

Answer 9

RST 2d § 241

Question 10

In contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance

Answer 10

Taylor v Caldwell - Impossibility

Question 11

Where the existence of a specific thing or person is, either by the terms of a bargain or in the contemplation of both parties, necessary for the performance of a promise in the bargain, a duty to perform the promise
(A) never arises is at the time the bargain is made the existence of the thing or person within the time for sensible performance is impossible, and
(B) is discharged if the thing or person subsequently is not in existence in time for seasonable performance, unless a contrary intention is manifested, or the contributing fault of the promisor causes the non-existence

Answer 11

Unke v Thorpe - RST 1st § 460 - Impossibility

Question 12

When the foundation or purpose of the contract is no longer possible or in existence at the time of performance, due to events not contemplated by the parties at the time of contract formation a contract may be exceed based on the doctrine of frustration of purpose

Answer 12

Krell v Henry

Question 13

Performance may be excused on the grounds of frustration of purpose when:

• Event occurs which substantially frustrates a party’s principal purpose of making the contract;
• Non-occurence of this even is a basic assumption on which the contract was made;
• Not the fault of the party whose performance is made impossible;
• Unless language or circumstances indicate the contrary

Answer 13

RST 2d § 265 - Modern Frustration of Purpose

Question 14

Performance may be excused on the grounds of supervening impracticability when:

• Event occurs which makes performance impracticable
• Non-occurrence of this event is a basic assumption on whig the contract was made;
• Not the fault of the party whose performance is made impossible
• Unless language or circumstances indicate the contrary

Answer 14

RST 2d § 261 - Modern Supervening Impractiability

Question 15

A thing is impracticable when it can only be done at an excessive or unreasonable cost, however when a party assumes that risk then the occurrence of supervening impracticability does not discharge performance

Answer 15

Transatlantic