Common Law: Substantial Performance
- A party must substantially perform his part of the contract.
- A party who substantially performs may recover.
- A party who has not substantially performed may still recover restitution.
- A party who fails to substantially perform is in material breach.
UCC: Perfect Tender
- The parties must strictly perform all duties, or they are in breach.
- Right to cure: If time still remains to perform, the seller has a right to cure.
UCC: Installment Contracts
Nonconforming Segments
- The buyer can reject only if the nonconformity substantially impairs the value of that shipment to the buyer and cannot be cured.
- If the seller makes adequate assurances that he can cure, the buyer must accept the shipment.
- Remaining segments: The buyer may cancel the entire contract only if the nonconformity substantially impairs the value of the entire contract to the buyer.
Express condition
Must be fully met
Implied condition
Requires substantial performance
Waiver
A condition may be waived by words or conduct; the waiving party then has a duty to perform
Wrongful interference
If a party hinders the other party’s performance and interferes with the occurrence of the condition, the condition will be excused, and the wrongful party will have duty to perform
Estoppel
If a party indicates that it will not enforce a condition, and the other party reasonably relies on this, the party will be estopped from later enforcing the condition
Impracticability
A duty may be discharged if:
* An unforeseeable event occurs making the performance of the contract extremely difficult; and
* The nonoccurrence of the event was a basic assumption at the time of the contract.
* The party seeking discharge must not be at fault.
Impossibility
An unforeseeable event occurs, making it objectively impossible for the party to perform.
Frustration of purpose
- If an unexpected event arises that destroys the party’s purpose for entering the contract, the party will be entitled to rescind the contract, even if the performance is still possible.
- The nonoccurrence of the event must have been a basic assumption at the time of the contract and the party seeking discharge was not at fault.
Intended beneficiaries
They can enforce
Assignment of Rights
- Almost all contract rights can be assigned
- Assignments are not allowed when they (i) materially increase the duty or risk of the obligor or (ii) materially reduce the obligor’s chances of obtaining performance.
Delegation of Duties
- When obligations are delegated, the delegator is not released from liability.
- Novation: Delegator is only released from liability if the other party to the contract agrees to release the delegator as a party to the contract and substitute a new one.
