Performance Standards

Question 1

What 4 arguments can you use to avoid finding a condition?

Answer 1

1. Wrongful prevention
2. Equitable estoppel
3. Waiver
4. Disproportionate forfeiture

Question 2

What is wrongful prevention?

Answer 2

When a party prevents fulfillment of a condition of his own obligation.

Question 3

What is equitable estoppel?

Answer 3

When a party reasonably relies on an inducing statement of another to his detriment.

Question 4

What is waiver?

Answer 4

When a party’s words and actions reasonably justify condition waiver, such waiver has been established and cannot be revoked. (use as defense against forfeiture)

Question 5

When is disproportionate forfeiture granted?

Answer 5

When a party:

(a) requests equitable relief in exercising a contractual right,
(b) his forfeiture outweighs the other party’s prejudice, and
(c) his failure was inadvertent.

Forfeiture must stand or lie with condition.

Question 6

What is disproportionate forfeiture?

Answer 6

When a breaching party stands to suffer/lose substantially more than the other party stands to gain by adhering to the K terms.

Question 7

Rest 2d §229 Disproportionate Forfeiture analysis

Answer 7

Unless a condition was a material part of the agreed upon exchange, a court may find no condition in order to avoid forfeiture.
Analysis:
1. Will s suffer forfeiture?
2. Did D enter into another K in reliance?
3. s, was this intentional or strategic move?
4. D, did you lull s into false sense of security?

Question 8

What 5 factors determine substantial performance?

Answer 8

(a) will injured party be deprived of a reasonably expected benefit?
(b) can injured party reasonably be compensated for that benefit?
(c) will party failing to perform suffer forfeiture - extent?
(d) the likelihood the failing party will cure his failure, and
(e) did party failing to perform comport with standards of good faith and fair dealing?

Question 9

Did breaching party substantially comply with contract terms? (2 factors)

Answer 9

(a) was breach in good faith?
(b) was compliance substantial
i. defects not pervasive,
ii. don’t signal a deviation from the general plan
iii. not so essential that they frustrate Ks purpose

Question 10

How can you tell whether a multipart contract is severable?

Answer 10

Did the parties agree to all promises as a single whole?

Question 11

What is the UCC perfect tender rule?

Answer 11

Every breach gets $ damages but a material breach excuses performance.

Question 12

Under UCC PTR, If goods or tender of delivery fail in any respect to conform to the contract, the buyer may:

Answer 12

(a) reject the whole,
(b) accept the whole,
(c) accept only conforming units + reject the rest.

Question 13

What constitutes acceptance under the perfect tender rule?

Answer 13

(1) Acceptance of goods occurs when the buyer
(a) after a reasonable opportunity to inspect the goods
(i) signifies to the seller that the goods are conforming, or
(ii) that he will keep them in spite of their non-conformity; or
(b) fails to make an effective rejection, or
(2) does any act inconsistent with the seller’s ownership.

Question 14

Under the UCC perfect tender rule when can you reject goods?

Answer 14

Within a “reasonable” timeframe following delivery with “seasonable” notice.

Question 15

Under the UCC perfect tender rule, what factors determine a reasonable timeframe for rejection?

Answer 15

A reasonable timeframe is determined by:
(a) Difficulty in determining defect,
(b) K terms,
(c) Perishability of goods,
(d) Course of performance after sale, before rejection.

Question 16

Under the UCC perfect tender rule, if buyer rejects, what options does a seller have to cure if the time for performance has not expired?

Answer 16

They may “seasonably notify” buyer of intent to cure + deliver within the contracted time.

Question 17

Under the UCC perfect tender rule, if buyer rejects non-conforming tender which seller had reasonable grounds to believe would be acceptable, how can a seller cure?

Answer 17

Seller may have an extension if seasonably notifies buyer.

Question 18

Under the UCC perfect tender rule, when can a buyer revoke acceptance of goods?

Answer 18

When the defect substantially impairs value.

Question 19

Under the UCC perfect tender rule, what conditions can a buyer revoke acceptance of goods?

Answer 19

Buyer must have accepted
(a) on assumption of cure where cure wasn’t seasonable, and
(b) without discovering nonconformity (if induced by seller or their assurances).

Question 20

Under the UCC perfect tender rule, if a party thinks a the other party is unlikely to perform, what should they demand?

Answer 20

Adequate assurance of performance?

Question 21

Under what conditions can a party demand adequate assurance of performance?

Answer 21

When a party has reasonable grounds for insecurity with respect to the performance

Question 22

How is a party required to demand adequate assurance of performance?

Answer 22

In writing.

Question 23

What is the effect on the contract, of demanding adequate assurance of performance

Answer 23

Until the party receives such assurance they may, if commercially reasonable, suspend related performance.

Question 24

What is the effect, if after demanding adequate assurance of performance, no response is received?

Answer 24

The offending party has repudiated the contract.

Question 25

Under CL, what 5 contract types are subject to the statute of frauds?

Answer 25

(a) executor-administrator
(b) suretyship
(c) marriage
(d) interest in land
(e) where performance extends longer than 1 year
(f) for goods priced at >$500.

Question 26

Under UCC, what contracts are subject to the statute of frauds?

Answer 26

For goods priced at >$500 unless there is some
1. writing sufficient to indicate that a contract for sale has been made, and,
2. signed by the offending party/authorized agent.

Not enforceable beyond the quantity of goods shown in writing.

Question 27

What types of warranties are there under the UCC?

Answer 27

1. Express
2. Implied
   a. merchantability
   b. fitness for purpose

Question 28

Under the UCC, what is an express warranty?

Answer 28

(a) an affirmation/promise (b) that relates to the goods, and (c) becomes part of the bargain.

Question 29

What are 2 tests to determine if there is an express warranty?

Answer 29

1. Did seller state a fact or opinion?
2. Would a reasonable person in buyer’s position find the statement reliable?

Question 30

When is there an implied warranty of merchantability?

Answer 30

When a (1) Seller is a merchant and (2) represent that the goods are merchantable, (3) buyer suffered damage, (4) damage was causal, and (5) seller was notified.

Question 31

When is an implied warranty of merchantability excluded?

Answer 31

When contract includes a warranty disclaimer that is clear and conspicuous.

Question 32

When is there an implied warranty of fitness?

Answer 32

When (a) seller knows the purpose for which the buyer requires the goods and
(b) buyer is relying on seller’s skill/judgement to choose them.

Question 33

When is an implied warranty of fitness excluded?

Answer 33

When a written warranty disclaiming such is conspicuous.