Cure and anticipatory repudiation

Question 1

What is cure?

Answer 1

In some cases, the law will allow a breaching party to fix a partial breach, if the time for performance has not come. If the partial breach is cured, any damages are treated as substantial performance.

Question 2

What is partial breech?

Answer 2

A material breach that is capable of cure and has been cured

Question 3

What is a material/ total breach?

Answer 3

A failure to perform a contractual obligation that is important enough that it undermines the agreement and warrants allowing the other party to terminate the contract and bring suit for damages.

Question 4

What is a time is of the essence clause?

Answer 4

if the K must be completed within a certain time and it isn’t then it is always material. The reason for the time limit must be explained.

Question 5

What is substantial performance?

Answer 5

Enough has been done to trigger the duty of performance

Question 6

What is the difference between substantial performance and material breach?

Answer 6

The question is how important is the content of the breach to the overall contract, this is a jury question.

Question 7

The remedies for the non-breaching party for a material/total breach?

Answer 7

§ Terminate the contract
§ Suspend own performance
§ Expectation damages

Question 8

The remedies for the non-breaching party for substantial performance?

Answer 8

Performance can be offset by the damages suffered. The calculation of this is based on the cost of rectification of the problem or Diminution in value

Question 9

Remedies for the breacher for a material breach?

Answer 9

Restitution for the benefit conferred, the market value at the time of the breach (quantum meruit). This will be offset by the victim’s (non-breaching party) damages. This also includes the cost of time or labor.

Question 10

Remedies for the breacher for substantial performance?

Answer 10

Entitled to the K price, offset by the cost of rectifying the breach.

Question 11

What is a divisible contract?

Answer 11

A contract that is structured in a way that allows the performance to be divided into self-contained units; A breach relating to some of the units could be isolated and confined to those units so that it does not affect other aspects of the contract.

Question 12

What makes a contract divisible?

Answer 12

When performance is broken down into 2 or more parts and consideration is assigned to each part. Also on the party’s intent, which is interpreted through the language of the K. Consider the overall purpose and structure of the transaction.

Question 13

When is a contract indivisible?

Answer 13

When consideration is conditioned on full performance.

Question 14

What is the perfect tender rule?

Answer 14

A seller must perfectly conform to the K terms. If goods fail to conform to the K, a buyer can accept the whole, reject the whole, or accept any commercial unit and reject the rest. Everything about a sellers delivery must conform or there is a breach.

Question 15

Acceptance under the perfect tender rule

Answer 15

1) if you have an opportunity to inspect and you indicate a willingness to accept them.
2) If you fail to reject within a reasonable time
3) do any act inconsistent with the seller’s ownership of the goods.

Question 16

When can acceptance under the perfect tender rule be revoked?

Answer 16

§ If there is an issue that impairs the value of the goods,

§ buyer reasonably believes that the seller will correct any defects,

§ They were accepted only because of a difficulty in discovering the defect

Question 17

Rejection under the perfect tender rule

Answer 17

• Buyer is obligated to hold the goods in a reasonable place with reasonable care,
• store the goods for the seller,
• resell the goods for the seller,
• reship them to the seller.

Question 18

What are some of the limitations on the harshness of the perfect tender rule?

Answer 18

The right to cure and an installment sales contract

Question 19

The right to cure under the perfect tender rule

Answer 19

Seller has the right to substitute conforming goods before the date of performance arrives.
§ Must have good faith
§ Give buyer timely notice
§ Pay all expenses of curing
§ Compensate buyer for any loss caused by the breach

Question 20

Installments sales contract (definitely tested)

Answer 20

One which requires or authorizes the delivery of goods in separate lots (batches or installments) to be separately accepted. They follow the substantial performance doctrine if they are determined to be installment contracts, even for the one batch that is non-conforming. Buyer can reject any non-conforming installment, only if the nonconformity substantially impairs the installment.

Question 21

Anticipctory repudiation under common law

Answer 21

didn’t exist, the only time a party could sue for breach was after the time for performance has come and gone.

Question 22

The rule for anticipatory repudiation

Answer 22

If a party communicates clearly, in words or conduct, that they won’t perform at the point when performance is due. The law will allow the party to treat this a s a breach and to sue then and there.

Question 23

What happens when a statement is misinterpreted as anticipatory repudiation

Answer 23

If a statement is misinterpreted as repudiation and the plaintiff terminates the K, then could be found liable for breach due to their repudiation

Question 24

When can anticipatory repudiation be retracted?

Answer 24

A party may retract their repudiation at any time so long as either:
○ The retraction comes to the attention of the non-breaching party before they rely on the retraction and materially change their position
○ The retraction comes before the other party indicating that the repudiation is final.

Question 25

What is a request for assurance?

Answer 25

Allows parties to respond to circumstances that fall short of a repudiation, but have reasonable grounds for insecurity. may request, for reasonable grounds, an adequate assurance of performance.

Question 26

Other rules for a request for assurance

Answer 26

○ Must come in writing under the UCC
○ if reasonable, performance may be suspended.
○ If the request is reasonable adequate assurance must be given. (30 days for UCC) failure to do this is also a repudiation.
○ If the request is unreasonable, and performance is suspended, then the requestor then has breached