Common Law Performance Issues

Question 1

Substantial Performance - Overview

Answer 1

Under a common law K, if one party has substantially performed, the other party is obligated to perform and complete performance

Question 2

Substantial Performance - Substantial Definition

Answer 2

Usually considered at least halfway complete

• less than perfect performance by one party does not excuse the other party from his obligation
• Thus substantial performance by A obligates B to perform; but B may seek money damages for the difference between the performance rendered and the performance expected

Note: look for substantial performance issues in construction Ks or other similar service Ks

Question 3

Material Breach - Overview

Answer 3

Material breach occurs when one party’s failure to perform under the K substantially deprives the other party of the benefit they bargained for

Note: Material breach rules do not apply to UCC Ks

Question 4

Material Breach - Rules Concerning Common Law Material Breach

Answer 4

Material breach by one party excuses performance by the other

• materiality of breach is a question of fact

Question 5

Material Breach - Rules Concerning Common Law Material Breach (Damages)

Answer 5

Recoverable for any breach to the extent they are foreseeable as a probable result of the breach

Question 6

Material Breach - Timeliness of Performance

Answer 6

Failure to perform by the time stated in a K is not a material breach if performance is rendered within a reasonable time after the time stated

Question 7

Material Breach - Timeliness of Performance (Exception)

Answer 7

Time is of the Essence Clauses

• If timely performance is essential as stated in the K, failure to perform by that time is a material breach
• Arises if one party indicates as a term of the K that performance by a given date is essential