7. Excuses for Non-Performance

Question 1

What is anticipatory repudiation?

Answer 1

An unambiguous statement or conduct that the repudiating party will not perform

Question 2

When must the statement or conduct for anticipatory repudiation?

Answer 2

Before performance is due

Question 3

What is the one party’s option when the other anticipatorily repudiates?

Answer 3

Immediate claim for damages

Question 4

Under anticipatory repudiation, when is the other party’s claim for damages not immediate?

Answer 4

When the non-repudiating party has finished performance

Question 5

Can anticipatory repudiation be withdrawn?

Answer 5

Yes, unless there has been a material change in position by the other party

Question 6

What happens when anticipatory repudiation is withdrawn?

Answer 6

The duty is reimposed on both parties

Question 7

When anticipatory repudiation is withdrawn, what can the non-repudiating party do?

Answer 7

Request adequate assurances and delay their performance until such is given

Question 8

Under article 2, when might a party be insecure as to whether or not the other party will perform?

Answer 8

When B has reasonable grounds through A’s words or conduct, to be insecure as to whether or not A will provide goods or pay for them

Question 9

When one party is insecure, what can they do?

Answer 9

Request adequate assurances, and, if commercially reasonable, can delay performance until such is given

Question 10

For what breaches can damages be recovered for?

Answer 10

Any breach

Question 11

What breaches excuse the other party from performing?

Answer 11

Material breaches

Question 12

In what instance will a breach not be material?

Answer 12

When there is substantial performance

Question 13

What question do we ask when the breach is due to quality of performance?

Answer 13

Is performance roughly comparable?

Question 14

What question do we ask when the breach is due to quantity of performance?

Answer 14

Is performance for less than half?

Question 15

What is the general consequence where there is a breach when less than half is done?

Answer 15

Entire contract is excused, even work done

Question 16

Where a contract is breached via quantity, what is the exception that the entire contract is excused?

Answer 16

Where the contract expressly divides performance, a breaching party can recover for work done even when there is a material breach

Question 17

For a divisible contract, what sort of division is needed?

Answer 17

The divided payments need to correspond with the value of the work done, and must not merely be progress payments

Question 18

What is an express condition?

Answer 18

Language in a contract that limits a party’s obligation to perform, e.g. as long as, only if, etc

Question 19

What is the result where an express condition does not occur?

Answer 19

Excuse, not breach

Question 20

What is the standard which compliance of an express condition must meet?

Answer 20

The condition must be strictly complied with

Question 21

In what instances might a court refuse to require strict compliance with an express condition?

Answer 21

Where strict compliance would cause excessive harm to the other party

Question 22

With a condition requiring personal satisfaction with performance, what is the standard?

Answer 22

Whether a reasonable person would be satisfied

Question 23

What are the two instances in which an express condition can be waived?

Answer 23

1. Party to benefit from it can expressly waive
2. Party to benefit from it acts in bad faith so the condition will not occur; this can waive it

Question 24

What is rescission?

Answer 24

Mutual agreement to cancel the contract

Question 25

When is rescission available?

Answer 25

Only whilst performance is still remaining

Question 26

What is accord and satisfaction?

Answer 26

Agreement between parties to an existing contract to accept a different performance in satisfaction of the current contract

Question 27

When the accord is satisfied, what happens to the old performance obligation?

Answer 27

It is excused

Question 28

If the accord is not satisfied, what are the other party’s options?

Answer 28

Can recover on accord OR original obligation

Question 29

What words trigger accord and satisfaction?

Answer 29

IF you do Y, THEN you won’t have to do X

Question 30

What is modification?

Answer 30

Agreement by parties to an existing contract to accept a different agreement in satisfaction of the existing obligation

Question 31

What is the non-breaching party’s option when a contract has been modified?

Answer 31

Recover on the new agreement only

Question 32

What is novation?

Answer 32

Agreement by parties to an existing contract to substitute a party

Question 33

What effect does novation have on the party who is replaced?

Answer 33

They are excused from the contract

Question 34

How is novation different from delegation?

Answer 34

1. Novation requires both parties to agree; delegation does not
2. Novation excuses the party who is replaced; delegation does not

Question 35

When can a later unanticipated event excuse?

Answer 35

When it affects a party’s ability to perform, not just the cost of performance

Question 36

For common law contracts where a later unanticipated event occurs, what question do we ask?

Answer 36

Is performance impossible**, or just **inconvenient?

Question 37

Under an article 2 contract, what is a buyer’s option when identified goods are destroyed when the risk of loss is on the seller? How come?

Answer 37

Buyer can recover damages, because identified goods are specific and if they are destroyed, performance is impossible

Question 38

Under an article 2 contract, what is a buyer’s option when generic/unidentified goods are destroyed when the risk of loss is on the seller? How come?

Answer 38

Buyer can still enforce the contract; generic goods can be replaced so performance is not impossible

Question 39

What is the effect on a subsequent law that renders the subject matter of a contract illegal?

Answer 39

Performance is excused

Question 40

What is the effect on a subsequent law that renders the purpose of a contract illegal?

Answer 40

Performance is excused, if the purpose was understood by the other party

Question 41

Do performance obligations survive the death of a party?

Answer 41

Generally, yes

Question 42

What is the one exception to the rule that performance obligations survive the death of a party?

Answer 42

Where the contract is for services, and the deceased was specially contracted