Performance Flashcards

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1
Q

What is Anticipatory Repudiation?

A

If one party unequivocally communicates to the other party that they will not perform when performance is due.

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2
Q

Can Anticipatory Repudiation occur by both words or conduct?

A

Yes

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3
Q

Does Anticipatory Repudiation apply only to Executory Contracts?

A

Yes

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4
Q

What is the most important element of Anticipatory Repudiation?

A

“Unequivocal” communication of non-performance

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5
Q

What are the four remedies for Anticipatory Repudiation?

A

1) Sue immediately 2) Suspend own performance and wait until repudiating party’s performance is due to sue 3) Treat the repudiation as an offer to rescind the contract and treat the contract as if it never occurred 4) Ignore the repudiation and urge performance

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6
Q

Anticipatory Repudiation may be retracted unless:

A

The non-repudiating party accepts the retraction or detrimentally relies upon it.

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7
Q

What is Prospective Inability or Unwillingness to Perform?

A

When a party has reasonable grounds (as opposed to unequivocal communication) to believe that the other party will not perform when due.

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8
Q

What is the difference between “Prospective Inability or Unwillingness to Perform” and “Anticipatory Repudiation”.

A

Doubts vs. Unequivocal Communication

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9
Q

How is conduct judged under a “Prospective Inability or Unwillingness to Perform”?

A

Reasonable Person Standard

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10
Q

Is there a difference in what is allowed under the Common Law and UCC when an innocent party believes another has a “Prospective Inability to Perform”?

A

Yes. Under Common law, the innocent party cannot act until the date of performance or until unequivocal repudiation is received. The UCC allows greater ability to respond.

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11
Q

Under the UCC, what three options are available if an innocent party believes the other party has a “Prospective Inability to Perform”?

A

Innocent party may 1) demand adequate assurances in writing 2) suspend own performance until assurances are received, and 3) if assurances are not forthcoming (usually 30 days) treat it as an Anticipatory Repudiation.

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12
Q

What does the UCC refer to “Prospective Inability to Perform” as?

A

“Reasonable Grounds for Insecurity”

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13
Q

Retraction of a “Prospective Inability to Perform” is possible unless:

A

There has been detrimental reliance by the innocent party

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14
Q

When discharging duties under Impossibility, when is a Subjective vs Objective test applied?

A

Objective test is applied for Impossibility by “Supervening Illegality” and “Destruction of Subject Matter.” Subjective test is applied when there is a death or physical incapacity of the person necessary to complete the contract.

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15
Q

What is Supervening Illegality with regard to Impossibility of performance?

A

A subsequent law enacted that renders the subject matter of a contract illegal.

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16
Q

What is Destruction of Subject Matter with regard to Impossibility of performance?

A

Subsequent destruction of subject matter through no fault of either party that makes performance impossible.

17
Q

Can Impossibility only arise after formation of the contract?

A

Yes

18
Q

If one party renders performance prior to Impossibility, and the other party has benefitted from that performance, how may that party recover?

A

In Quasi-Contract

19
Q

What is Force Majeure?

A

When a party anticipates one or more events that it cannot prevent and that might impede its performance, it may introduce a term intended to excuse it from performance if the event occurs.

20
Q

Does a Force Majeure clause normally enumerate excusing events, like “Act of God, earthquake, strike, civil commotion, acts of government, and delays in the delivery of material and supplies”?

A

Yes

21
Q

What is Impracticability?

A

When a party will not perform because it is not commercially practical due to an excessive and unreasonable cost (or difficulty) and that difficulty was unanticipated.

22
Q

What is Frustration of Purpose?

A

Contractual duties can be discharged due to a supervening and (reasonably) unforeseeable event at the time of contract that destroys (or almost destroys) the purpose of the contract.

23
Q

Under Frustration of Purpose, must both parties have understood the “purpose” of the contract at formation?

A

Yes

24
Q

What is a Mutual Rescission?

A

When both parties mutually and expressley agree to rescission, contractual duties can be discharged.

25
Q

For a valid Mutual Rescission must the contract be executory?

A

Yes

26
Q

Will a mutual agreement to rescind a bilateral contract (where there is already part performance) be enforceable?

A

Yes, generally

27
Q

Will a mutual agreement to rescind a unilateral contract (where there is already part performance) be enforceable?

A

No, unless there is additional consideration paid by the non-performing party.

28
Q

Must a Mutual Rescission be made in writing?

A

No, it may be made orally unless it must be in writing

29
Q

What is Accord and Satisfaction?

A

An “Accord” is an agreement to discharge an existing contractual duty based on unliquidated debt. “Satisfaction” is the performance of the Accord.

30
Q

Does the Accord actually “Discharge” a duty?

A

No, it suspends the other party’s power to enforce the duty.

31
Q

Does a “Satisfaction” of the Accord discharge a duty?

A

Yes, it discharges both the original debt and the Accord.

32
Q

Is there any discharge of duties until there is both an Accord (and) Satisfaction of the Accord?

A

No

33
Q

How is an Accord and Satisfaction often accomplished via check?

A

By a check conspicuously marked ‘Paid in full”

34
Q

Under Discharge of Duties, what is an “Account Stated”?

A

A discharge of contractual duties when the parties have engaged in multiple transactions and have agreed to a “final balance due”, rendering any further rights under the individual transactions discharged.