VI. Performance and Excuse of Nonperformance Flashcards
Performance at Common Law
- must substantially perform all that is called for in the K
Perofrmance under Article 2
Requires Perfect tender–delivery and condition must be exactly as promised
Art 2: Obligation of Good Faith
honesty in fact and the observance of reasoanble commercial standards of fair dealing
Seller’s Obligation of Tender & Delivery
- 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
- tender of delivery: must put and hold conforming good at buyer’s dispointion for time sufficient to take possesion
- 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
Buyer’s Obligation to Pay/Right to INspect
- 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
Conditions
party does not have duty to perform unless condition complete so may be justiied in failing to perform
Distinction b/w promise and condition
- Promise: committment to do or refrain from something. if conditional, failure to perfeorm is a breach
- Condition: either
- an event or state of the wrold that must occur before performing
- 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
Classification of Conditions
- Conditions Precednet: one that must occur before an absolute duty of performance arises
- Conditions concurrent: capalbe of occuring together and that the parties are bound to perfom at the same time. Each is precedent to each other
- Condition subsequent: one the occurence of which cuts off an already existing absolute duty
Express Conditions
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
Promisors satisfaction as condition precednet
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
Constructive or Implied Conditions
- 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
Effect of Condition–Equitable Remedy
can get unjust enrichment where one performance was not fully done
Excusing Condtions
- 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
Excuse by Hindrance or Failure to Cooperat
party to perform upon condition prevents the condition from occurring, excused if wrongful (would not have contemplated this type of conduct)
Excuse by Actual Breach
if actual breach.
at common law, must be material
Excuse by Anticipatory Repudiation
prior to performance, indciates he will not perform when time occurs. Will excuse if following conditions are met
- Executory bilateral K requirement–only with these types of K
- Must be unequivocal
- 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)
- Retraction of Repudiation: can do unless other party has canceled, materailly change position in reliance on repuidation
Excuse by Prospective INability or Unwillingness to Perform
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
Excuse by Substantial Performance
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
Excuse by Divisiblity of K
allowed for the agreed upon unit of that K. Does not need the whole thing performed
Excuse by Waiver or Estoppel
- 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
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Has the absolute Duty to perform been discharged
- Discharge by perofrmance or tender of perofmrance
- Dicharge by occurrence of condition subsequent
- discharge of illegality
- Discharge by impossibility Impractability or Frustration
- Discharge by Recission
- Discarge by Modification
- NOvation
- Cancellation
- Release
- Substituted K
- Accord and Satisfaction
- Accoutn STated
- Lapse
- Running of SofL
Discharge by Impossibility
- 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
Discharge by IMpracticability
- 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)
Discharge by Frustration
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
Discharge by Mutual Recission
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
Unilateral Recission
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
Partial Discharge by Modifcation
- Only discharge the part of the K modified
- Must have
- mutual assent
- consdieration
- not requried for k on sale of goods
Discharge by Novation
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
Discharge by Cancellation
Destruction alone is not okay unless parties intent shown to discharge with consdiration present
Discharge by RElease
K not to sue on K. Must be in writting and supported by consdiartion or estoppel elemnts
Discharge by Substituted K
Enter into a second K that imemediately revookes the first. Intent goerns
Discharge by accord and satisfaction
- 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
- must be supported by consdieartionl
- 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
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Discharge by Account Stated
agree to an amount as a final balance due. Merger of transactions
Discharge by Lapse
Lapse may be reasonable time unelss says time is of the essence
Effect of Running of SofL
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.
