VI. Performance and Excuse of Nonperformance

Question 1

Performance at Common Law

Answer 1

• must substantially perform all that is called for in the K

Question 2

Perofrmance under Article 2

Answer 2

Requires Perfect tender–delivery and condition must be exactly as promised

Question 3

Art 2: Obligation of Good Faith

Answer 3

honesty in fact and the observance of reasoanble commercial standards of fair dealing

Question 4

Seller’s Obligation of Tender & Delivery

Answer 4

• Non Carrier case
  
  • tender of delivery: must put and hold conforming good at buyer’s dispointion for time sufficient to take possesion
    
    • must give notice to buyer
    • tender must be at a reasonable hour
  • absent contracy agreement, place of delivery is seller’s business or his residence
• Carrier case
  
  • shipment K: need not see goods reach buyer only that, 1) gave reasonable carrier the goods, 2) obtain and tender any documents necessary to take possession and 3) notify buyer of shipment
  • Destination K: put and hold ocncfrming goods at buyer’s disposition

Question 5

Buyer’s Obligation to Pay/Right to INspect

Answer 5

• Delivery and payment concurrent conditions
  
  • noncarrier: cash due with tender of delivery
  • Carrier: at time at place which buyer receives goods (shipment or in hands)
• Payment by check: okay unless seller demands cash and gives time to procure it
• Istallment K: demand payment for each installment
• BUyers right of inspection: Right to inspeect unless COD or has promised to pay without inspection

Question 6

Conditions

Answer 6

party does not have duty to perform unless condition complete so may be justiied in failing to perform

Question 7

Distinction b/w promise and condition

Answer 7

• Promise: committment to do or refrain from something. if conditional, failure to perfeorm is a breach
• Condition: either
  
  1. an event or state of the wrold that must occur before performing
  2. an event or state of the world of which releases a party from duty to perform
  • no breach until promise is imeediate duty to perform
• Failure of promise is a breach. Failure of a condition relieves obligations of party to perform
• Common words
  
  • Conditions: provided, if, when
  • Promise, promise agree

Question 8

Classification of Conditions

Answer 8

1. Conditions Precednet: one that must occur before an absolute duty of performance arises
2. Conditions concurrent: capalbe of occuring together and that the parties are bound to perfom at the same time. Each is precedent to each other
3. Condition subsequent: one the occurence of which cuts off an already existing absolute duty

Question 9

Express Conditions

Answer 9

Explicit contractual provision

1) a party does not have a duty to perform unelss some event occures OR 2) if some event occurs of ails to occur, the obligion is suspended or terminated

Question 10

Promisors satisfaction as condition precednet

Answer 10

will not pay unless satsified with out party’s performance

Can also pass to a 3P

Personal taste of judgment can only be satsified when personally satisfied but must ahve good faith

Reasonable person if by mechanical fitness, utility or marketability

Question 11

Constructive or Implied Conditions

Answer 11

• Constructive conditions of performance: condition on the other party either rendering his performance or making a tender of his performance
• Constructive Conditions oc Cooperation And notice: conditioned on other party’s cooperation. Must give him notice that the perofrmance is due.
• Order of Performance:
  
  • simultanous possible
  • One takes a long time–long one is precedent

Question 12

Effect of Condition–Equitable Remedy

Answer 12

can get unjust enrichment where one performance was not fully done

Question 13

Excusing Condtions

Answer 13

• Excuse by Hindrance or Failure to Cooperate
• Excuse by Actual Breach
• Anticipatory Repudiation
• Prospective INability or Unwillingness to Perform
• Substantial performance Divisibility of K
• Waiver or Estaoppel
• Impossibility IMpractacability or Frustration

Question 14

Excuse by Hindrance or Failure to Cooperat

Answer 14

party to perform upon condition prevents the condition from occurring, excused if wrongful (would not have contemplated this type of conduct)

Question 15

Excuse by Actual Breach

Answer 15

if actual breach.

at common law, must be material

Question 16

Excuse by Anticipatory Repudiation

Answer 16

prior to performance, indciates he will not perform when time occurs. Will excuse if following conditions are met

1. Executory bilateral K requirement–only with these types of K
2. Must be unequivocal
3. Effect of Repudiation–> nonrepudiating party has four options: 1) treat as total breach and sue; 2) supspend performance wait to sue when perofrmacen is due; 3) treat as offer to rescind and discharge K; or 4) ignore nad urge to perform (not a waiver or fight to sue)
4. Retraction of Repudiation: can do unless other party has canceled, materailly change position in reliance on repuidation

Question 17

Excuse by Prospective INability or Unwillingness to Perform

Answer 17

Other party has belief that perofrmaing party will not be able to perform

more about rasing doubts

can suspend until they receive adequate assurances that they will perform

Question 18

Excuse by Substantial Performance

Answer 18

Complete performance wiaved if substnatial performance is performed when other party breaches

Applied only if a constructive condition is involved.

Will not apply when there is an express condition for fear this would defate the express intent

Question 19

Excuse by Divisiblity of K

Answer 19

allowed for the agreed upon unit of that K. Does not need the whole thing performed

Question 20

Excuse by Waiver or Estoppel

Answer 20

• Estoppel Waiver: waiving a condition before it happens and other party detrimentally relies on that wiaver. May be retracted up until the other party relies on it to detraction
• Election waiver: terminate or continue. Continue means she has waived condition
• Conditions that may be waived: no considration, considered ancillary or collateral
• Waiver in INstallment K: can insist on strict compliance w/ terms for future installments if waiver not supported by consdieration
• Right to damages for failure of condtion: waiver only of total breach. Can still be approached for damages
  *

Question 21

Has the absolute Duty to perform been discharged

Answer 21

1. Discharge by perofrmance or tender of perofmrance
2. Dicharge by occurrence of condition subsequent
3. discharge of illegality
4. Discharge by impossibility Impractability or Frustration
5. Discharge by Recission
6. Discarge by Modification
7. NOvation
8. Cancellation
9. Release
10. Substituted K
11. Accord and Satisfaction
12. Accoutn STated
13. Lapse
14. Running of SofL

Question 22

Discharge by Impossibility

Answer 22

• Must be objective deterimiation–cannot be done by anyone
• Must arise after K entered into
• Each party is excused
• Partial impoosbility excuses only those parts
• Termporary supsneds it
• Part performance before allows recovery in quasi-K
• Specific situations
  
  • death or incapcity of person necessary to do it (unless delegated)
  • supervening illegality
  • Destrcution of K subject or means of perofrmance
    
    • even if building destroyed in construction contract must rebuild
    • Does not apply if risk already passed to buyer
    • Must be specific in destruction

Question 23

Discharge by IMpracticability

Answer 23

• Test: 1) extreme and unreasonable difficulty or expense AND 2) nonoccurrence was a basic assumption of parties
• Article 2: seller discharged to the extent of the impossibilty or impracticability
  
  • sufficeint events: shortage of raw material (not just cost changes)

Question 24

Discharge by Frustration

Answer 24

If purpose of K has become valueless by some event not the fault of party seeking discharge

Elements necessary

• 1) Supervening Act
• 2) Did not reasonalby foresee at time of K
• 3) purpose of K has been completely or almost completely destoryed AND
• 4) purpose of K was realized by both parties at time of formation

Note Payor of money will raise frusration (paying money not impractiable) those seller of land goods or service raise impossbility or imrpactiability

Question 25

Discharge by Mutual Recission

Answer 25

discharged by an express agreement b/w parties. Msut be supported by consdieration (giving up duty to perform)

• must be excutory
  
  • ineffective if unilateral unless new consdieariont, promissory estoppel or intent of gift as substitute is present
  • Partially performed bilateral K will be enforced
• Formalities: may be made orally unless SOF or for sale of goods
• 3P beneficiary: if have already vested, than may not be discharged by mutual recission

Question 26

Unilateral Recission

Answer 26

When one of the parties to the K desires to rescind but other party desires perofrmance

must have adequate legal grounds such as mistake misrep durress and failure of considartion

Question 27

Partial Discharge by Modifcation

Answer 27

• Only discharge the part of the K modified
• Must have
  
  • mutual assent
  • consdieration
    
    • not requried for k on sale of goods

Question 28

Discharge by Novation

Answer 28

substitutes new party to assume benefits and dtuies.

Elements: 1) previous valid K; 2) agreement among parties; 3) immediate extinguishment of K; 4) valid and enforceable new K

Question 29

Discharge by Cancellation

Answer 29

Destruction alone is not okay unless parties intent shown to discharge with consdiration present

Question 30

Discharge by RElease

Answer 30

K not to sue on K. Must be in writting and supported by consdiartion or estoppel elemnts

Question 31

Discharge by Substituted K

Answer 31

Enter into a second K that imemediately revookes the first. Intent goerns

Question 32

Discharge by accord and satisfaction

Answer 32

• Accord: agreement in which one party to an existing K agrees to accept, some other different performacnce in lieu
  
  • must be supported by consdieartionl
    
    • if lesser than original, okay if different type or if paid to a 3P
  • often used with payment of debt. Usually okay as long as there is bona fide dispute
  • Effect of accord: supsneds right to enforce. Does not discharge
• Satisfaction: perofrmance of the accord agreemnt. Discharges both the original and accord K
  
  • breach before satsifaction. Debtor breach: may sue on original or accord K; Creidtor breach: 1) can use accord as equitable defense OR 2) wait until damaged and then sue
• Checkes tenders as payment in full when monetary claim is uncertain or there is bona fide dispute if it states that conspicuoulsy
  *

Question 33

Discharge by Account Stated

Answer 33

agree to an amount as a final balance due. Merger of transactions

Question 34

Discharge by Lapse

Answer 34

Lapse may be reasonable time unelss says time is of the essence

Question 35

Effect of Running of SofL

Answer 35

if sofl has run, generally breach is barred. Does not discharge duties–only judicial remedies

Contrast to lapse which discharges while this only makes it unenforceable in court.