Chapter 18

Question 1

Discharge

Answer 1

The termination of an obligation
- when the parties have fully performed their contractual obligations or when the law releases the parties from performance

Question 2

Performance

Answer 2

The fulfillment of ones duties arising under a contract with another; the normal way of discharging ones contractual obligations

Question 3

Condition

Answer 3

A possible future event, the occurrence or nonoccurence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract

• precedent
• subsequent
• concurrent

Question 4

Condition precedent

Answer 4

A condition in a contract that must be met before a party’s promise becomes absolute

Question 5

Conditions subsequent

Answer 5

A condition in a contract that operates to terminate a party’s absolute promise to perform

Question 6

Concurrent conditions

Answer 6

Conditions in a contract that must occur or be performed at the same time; they are mutually dependent. No obligations arise until these conditions are simultaneously performed

Question 7

Tender

Answer 7

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so

Question 8

Complete performance

Answer 8

When a party performs exactly as agreed

Question 9

Substantial performance

Answer 9

A party who in good faith performs substantially all the terms of a contract can enforce the contract against the other party.

1. Good faith
2. Performance can not vary from what was promised in the contract
3. The performance must create substantially the same benefits as those performed in the contract

Question 10

Breach of contract

Answer 10

The failure without legal excuse of a promisor to perform the obligations of a contract

Question 11

Anticipatory repudiation

Answer 11

An assertion or action by a party indicating that he or she will not perform an obligation that the party is contractually obligated to perform at a future time
- treated as a material breach of the contract

Question 12

If no time for performance is stated in the contract what is implied

Answer 12

A reasonable time

Question 13

mutual rescission

Answer 13

An agreement between the parties to cancel their contract releasing the parties from further obligations.

Question 14

Novation

Answer 14

The substitution by agreement of a new contract for an old one, with the rights under the old one being terminated. Typically there is a substitution of a new person who is responsible for the contract and the removal of an original party’s rights and duties under the contract

Question 15

Requirements of a novation

Answer 15

1. A previous valid obligation
2. An agreement by all parties to a new contract
3. The extinguishing of the old obligation
4. A new contract that is valid

Question 16

Discharge in bankruptcy

Answer 16

The release of a debtor from all dents that are provable, except those specifically excepted from discharge by statute

Question 17

Impossibility of performance

Answer 17

A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes impossible or totally impracticable (through no fault of either party)

Question 18

When performance is impossible

Answer 18

1. When one of the parties to a personal contract dies or becomes incapacitated prior to performance
2. When the specific subject matter of the contract is destroyed
3. When a change in law renders performance illegal

Question 19

Commercial impracticability

Answer 19

A doctrine under which a seller may be excused from performing a contract when

1. A contingency occurs
2. The contingency’s occurrence makes performance impracticable
3. The nonoccurence of the contingency was a basic assumption on which the contract was made

Question 20

Frustration of purpose

Answer 20

A court created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists (due to reasons behind that party’s control)