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Question 1

What is a promise?

Answer 1

Undertaking to perform or refrain from doing a designated act

Question 2

What is an independent or unconditional promise?

Answer 2

One that is unqualified, and nothing but the lapse of time makes it enforceable

Question 3

Does an independent or unconditional promise have to be performed even if the other party hasn’t performed?

Answer 3

Yes

Question 4

If A promises to build a house for B, who will pay when the house is finished, what must A do?

Answer 4

He must perform before B is required to do anything. If he materially breaches, he can cancel and sue even though he hasn’t performed if he proves he was ready, willing, and able to pay

Question 5

Can repudiation from either party relieve an independent promise of duty to perform?

Answer 5

Yes

Question 6

Why are few promises independent?

Answer 6

Because it is presumed that a promise isn’t intended to be independent unless it clearly says so

Question 7

What is an example of an independent promise in a lease agreement?

Answer 7

Tenant agrees to pay rent, and landlord agrees to make repairs. T still owes a duty even if the landlord doesn’t perform (but if LL’s nonperformance is extreme, it can make a constructive eviction that allows T to cancel the lease).

Question 8

If separate contracts are entered by the same parties at the same time, and breach of one happens, what happens to the other?

Answer 8

It still stands and is not affected by the other breach

Question 9

What is a mutually dependent promise?

Answer 9

When parties intend performance of one to be conditioned on performance by the other

Question 10

What are the three types of conditions?

Answer 10

Precedent, concurrent, subsequent

Question 11

What is a condition precedent?

Answer 11

An act or event, other than lapse of time, that must exist or occur before a duty to perform is triggered

Question 12

What does a condition precedent trigger?

Answer 12

Performance

Question 13

If a condition precedent is never met, what happens?

Answer 13

The duty is never triggered (duty didn’t disappear, it just wasn’t triggered)

Question 14

What is an example of a condition precedent?

Answer 14

“I will buy your autographed baseball if your team wins the game.” Unless and until the team wins, there’s no obligation to buy the ball, and if the team doesn’t win, the condition failed.

Question 15

Who has the burden of proof for a condition precedent?

Answer 15

P

Question 16

How can a condition precedent be excused?

Answer 16

If wrongful conduct of a party prevents it from happening

Question 17

A performance that requires time to accomplish is a condition precedent to what?

Answer 17

The promised performance of a single act of payment

Question 18

What is a condition concurrent?

Answer 18

An event must simultaneously occur at the moment duty is being performed (performance exchanged at the same time)

Question 19

For a condition concurrent, neither party can put the other in breach for failure to perform without what?

Answer 19

A tender: readiness and willingness to perform with present ability to do so, and notice to the other party

Question 20

What is an example of a condition concurrent?

Answer 20

I will sell you my laptop and you will give me $1000, and we will exchange them at the same time

Question 21

What is a condition subsequent?

Answer 21

Any event that discharges/terminates a duty of performance that has already arisen

Question 22

What is an example of a condition subsequent?

Answer 22

S agrees to work for P for a month unless he is accepted to law school. His duty stays subject to the condition subsequent that he is not admitted

Question 23

When do you often see condition subsequents?

Answer 23

In insurance policies. The company will pay for a theft, but only if after the theft happens and the duty to pay matures, proper reports are submitted. Theft and the filing of the report are both conditions precedent to the company’s performance of its promise to pay (if both conditions are fulfilled, company must pay or be in breach).

Question 24

What is a tricky situation for conditions subsequent?

Answer 24

Often conditions are worded like they are subsequent, but they are actually precedent. Ie: Insurance company insures you against fire by saying their liability is discharged if you don’t send a report within 30 days or sue within a year. This is actually a condition precedent because the duty doesn’t arise unless a report is filed within 30 days, the other is a real condition subsequent because if suit is brought within a year, the duty is discharged.

Question 25

Who has the burden of proof for a condition subsequent?

Answer 25

The party claiming a duty has arisen and been discharged

Question 26

If a clause says payment is conditioned on an event happening, and literal interpretation of that would result in forfeiture, what do courts do?

Answer 26

Construe the condition to just be a guide for the time for payment, and not absolute that must happen before payment

Question 27

If you contract to pay someone $20,000 to do electrical work to be paid when you sell the building for profit, and they complete the work, but you don’t make a profit, what will the courts do?

Answer 27

Instead of allowing a forfeiture, courts say that sale condition was just identifying a reasonable time for payment so you still have a duty to pay

Question 28

If a general contractor doesn’t pay a subcontractor because he hasn’t gotten the money from the owner, what are the two situations that creates?

Answer 28

• express condition: if the contract clearly says the subcontractor will be paid through the owner, then he isn’t yet entitled to payment because the condition is not met
• language of time: language isn’t the condition, just a convenient time to pay, so general contractor’s obligation stands to pay within a reasonable time

Question 29

How does the solvency of an owner relate to the general contractor?

Answer 29

It is a credit risk incurred by him

Question 30

What are the different ways a condition arises?

Answer 30

• express condition

- constructive condition

Question 31

What is the other name for an express condition?

Answer 31

Implied in fact