CONDITIONS AND PERFORMANCE

Question 1

What is the general rule regarding conditions and performance in contract law?

Answer 1

The failure of a condition relieves a party of the obligation to perform. The failure of a party to perform a promise constitutes a breach.

Question 2

What is a condition in contract law?

Answer 2

A condition is a future event that must occur before a party’s contractual rights or obligations are created, destroyed, or enlarged.

Question 3

What is a promise in contract law?

Answer 3

A promise is a party’s obligation to act or refrain from acting under the contract.

Question 4

How is ambiguity between a condition and a promise resolved?

Answer 4

Courts usually resolve ambiguity in favor of a promise rather than a condition. Restatement (Second) of Contracts § 227.

Question 5

What are the two types of conditions in contract law?

Answer 5

Conditions may be express (clearly stated in the agreement) or implied (presumed based on the nature of the transaction).

Question 6

What is an express condition?

Answer 6

An express condition is one that is clearly stated in the contract. It uses words like “on the condition that” or “provided that.”

Question 7

Must an express condition be strictly complied with?

Answer 7

Yes. Express conditions must be fully satisfied unless excused; substantial performance is not enough.

Question 8

Are arbitration clauses treated as express conditions?

Answer 8

Yes, arbitration clauses are enforceable unless a consumer is waiving an important substantive right.

Question 9

Can missing an express condition cost someone the right to get paid?

Answer 9

Yes. If an express condition isn’t met, the party expecting payment might get nothing, even if that seems harsh.

Question 10

What’s an example of an express condition in a contract to sell a house?

Answer 10

If the buyer only has to buy the house if they get a loan, that’s an express condition — no loan, no deal.

Question 11

What is an implied condition?

Answer 11

It’s not written down, but the court treats it as part of the deal because it’s either obvious or necessary for fairness.

Question 12

What is an implied-in-fact condition?

Answer 12

A condition the parties truly intended but failed to express, inferred from the circumstances of the agreement.

Question 13

What is an implied-in-law (constructive) condition?

Answer 13

A condition supplied by a court to ensure fairness, even if the parties did not intend it.

Question 14

What are constructive conditions of exchange and where do they arise?

Answer 14

They require one party (like a builder or employee) to substantially perform first before the other’s obligation (e.g., payment) is triggered. Common in construction and employment contracts.

Question 15

What duties does the UCC impose alongside implied conditions?

Answer 15

The UCC implies a duty of cooperation when one party’s performance depends on the other’s cooperation. UCC § 2-311(3).

Question 16

What level of performance satisfies an implied condition?

Answer 16

Substantial performance is enough to satisfy an implied condition.

Question 17

What are the 3 main types of conditions based on timing?

Answer 17

1. Condition precedent – must happen before a duty kicks in
2. Condition subsequent – ends a duty that already existed
3. Concurrent conditions – both parties must perform at the same time

Question 18

What is a condition precedent?

Answer 18

A condition that must happen before a party’s duty to perform arises.

Question 19

What’s an example of a condition precedent?

Answer 19

A agrees to hire B if B passes the bar exam. B must pass the exam before A has to hire him.

Question 20

What is a condition subsequent?

Answer 20

A condition that, if it happens, will end a duty that already existed

Question 21

What’s an example of a condition subsequent?

Answer 21

B agrees to work for C until B passes the bar exam. If B passes, the job ends — that’s a condition subsequent.

Question 22

How does the Restatement (Second) treat condition subsequent?

Answer 22

As a discharging event, not a “condition” in the technical sense.

Question 23

What is a concurrent condition?

Answer 23

When both parties’ duties depend on each other — they must perform at the same time.

Question 24

What’s an example of concurrent conditions?

Answer 24

A agrees to buy a TV from B for $1,000. A must pay and B must deliver the TV at the same time.

Question 25

Who has the burden of proof for a condition precedent?

Answer 25

The plaintiff must prove the condition happened.

Question 26

Who has the burden of proof for a condition subsequent?

Answer 26

The defendant must prove the condition occurred to get out of liability.

Question 27

What standard is generally used to determine if a condition has been satisfied?

Answer 27

Objective standard – whether a reasonable person would be satisfied.

Question 28

When is a subjective standard used instead of an objective one?

Answer 28

When performance is based on someone's aesthetic taste (e.g., portrait painting). The party must be genuinely dissatisfied in good faith, even if unreasonable.

Question 29

When only one party’s performance takes time, who must go first?

Answer 29

The party needing more time must perform first, unless the contract says otherwise.

Question 30

What are constructive conditions of exchange?

Answer 30

When both parties can perform at the same time, each party’s duty depends on the other’s performance. If one doesn’t perform, the other is excused.

Question 31

What is substantial performance?

Answer 31

Performance of everything except minor terms. If done in good faith, the party can recover under the contract.

Question 32

When does strict compliance apply instead of substantial performance?

Answer 32

When the parties have agreed to an express condition precedent or concurrent condition.

Question 33

What are the 5 factors courts use to decide if a breach is material?

Answer 33

1. Loss of expected benefit 2. Ability to be compensated 3. Forfeiture by breaching party 4. Likelihood of cure 5. Good faith of breaching party

Question 34

What is the UCC’s perfect tender rule?

Answer 34

Seller must deliver goods that exactly meet the contract. Substantial performance is not enough.

Question 35

When can a seller cure a nonconforming tender?

Answer 35

If time remains under the contract or reasonable grounds exist to believe the buyer would accept.

Question 36

What does the UCC say about title warranties?

Answer 36

The seller automatically warrants: 1. Good title 2. Rightful transfer 3. No undisclosed liens UCC § 2-312

Question 37

What is a shipment vs. destination contract?

Answer 37

Shipment contract: Seller must get goods to a carrier Destination contract: Seller must deliver goods to a specified place (FOB terms control)

Question 38

Does perfect tender apply to installment contracts?

Answer 38

No. Installments use a substantial conformity standard. (UCC § 2-612)

Question 39

When can a buyer reject one installment?

Answer 39

Only if the nonconformity substantially impairs the value of that installment and cannot be cured.

Question 40

When can a buyer cancel the whole installment contract?

Answer 40

If the breach substantially impairs the value of the entire contract.

Question 41

What are a buyer’s duties when receiving a conforming tender?

Answer 41

Buyer must accept and pay, unless otherwise agreed. (UCC § 2-507)

Question 42

When can a buyer inspect the goods?

Answer 42

Before payment, unless: COD contract Payment is against title docs (UCC § 2-310)

Question 43

Can a buyer reject goods after inspecting?

Answer 43

Yes, if the goods don’t conform. Buyer must do so seasonably and explain the rejection.

Question 44

What is the implied duty of good faith and fair dealing?

Answer 44

Every party must act with honesty in fact and observe reasonable commercial standards. (UCC § 1-201(20); Restatement § 205)

Question 45

Does the duty of good faith apply to contract formation?

Answer 45

No. It starts after a contract exists. But bad faith during negotiation may lead to promissory estoppel or fraud defenses.

Question 46

What’s the difference between suspension and excuse of a condition?

Answer 46

Suspension: The condition is temporarily paused, but can come back. Excuse: The condition is permanently removed — the benefiting party can’t raise it as a defense later.

Question 47

What is a waiver of a condition?

Answer 47

A party whose duty depends on a condition can give it up (waive it) by words or actions.

Question 48

When can a waived condition be reinstated?

Answer 48

If the condition was not material, and: i) The waiving party retracts the waiver before the condition was supposed to happen, and ii) The other party hasn’t relied on the waiver.

Question 49

Do common law and UCC treat waiver the same?

Answer 49

Common law: Only non-material conditions can be waived without consideration. UCC: Any condition can be waived in good faith, no consideration needed, but may need to meet the Statute of Frauds if price is $500+.

Question 50

What is the doctrine of prevention?

Answer 50

If a party wrongfully interferes with a condition, the condition is excused, and that party has an absolute duty to perform. (Restatement §§ 225, 245)

Question 51

What duties are included under the duty of good faith and fair dealing?

Answer 51

Do not hinder the other party’s performance Cooperate when necessary

Question 52

What is election in the context of conditions?

Answer 52

If a party keeps going with the contract after a condition wasn’t met, they’ve waived the right to use it as a defense — but may still get damages.

Question 53

How does estoppel excuse a condition?

Answer 53

If a party says or acts like they’re not going to enforce a condition, and the other party reasonably relies, the condition is excused.

Question 54

What is forfeiture in contract law?

Answer 54

The harm a party suffers when they lose out because a condition didn’t happen.

Question 55

When will a court excuse a condition to avoid forfeiture?

Answer 55

When not enforcing the condition would cause disproportionate harm, and the condition was not material to the contract. (Restatement § 229)