Excuse Based on Later Event Flashcards
(18 cards)
Is the other party’s breach an excuse for non-performance?
Art. 2: perfect tender rule, free reign
Common law: injured party can recover damages for any breach; only material breach provides excuse
What is anticipatory repudiation?
Contract repudiated before performance due
Performer can stop and sue for damages
Can be retracted if not relied upon
What is a failure to give adequate assurance?
Party with reasonable grounds for being insecure about other party’s performance may request in writing adequate assurance that other party will perform in accordance with contract
If not provided, same as anticipatory repudiation
Cannot rewrite contract or demand particular type of assurance
What is rescission?
Agreement to cancel the contract, enforceable only if both parties have some performance remaining (otherwise no consideration)
What is modification? and when does it take effect?
Agreement to replace existing contract with new one; takes effect immediately
What is accord and satisfaction?
Accord is an agreement to accept performance in future satisfaction of existing duty; satisfaction is performance of the accord; existing duty extinguished only when accord is satisfied
What is novation?
Agreement to substitute new party for existing one; without both parties’ consent, simple delegation of duties that does not exonerate first party
In general, what is impossibility?
Later, unforeseen event that makes performance impossible may provide seller with excuse for non-performance (Art. 2: impracticability)
What are the four types of impossibility?
1) Destruction
2) Death/incapacity of essential person
3) Supervening government regulation
4) Increase in cost of seller’s performance
Describe the type of impossibility where something necessary for performance is destroyed
Common law: excuse for non-performance
Art. 2: Same except (a) seller excused only if damaged/destroyed goods were identified to the contract; and (b) seller who bore ROL when goods damaged or destroyed excused by impracticability but buyer is not
For there to be impossibly who must die or be incapacitated?
An essential person, and only then is non-performance excused.
Does supervening governmental regulation excuse performance?
Yes
What if my costs increase as a seller? i.e. it is more expensive to perform?
MBE: almost never excuses seller
NY: can excuse if % or $ increase is high enough.
What is a frustration of purpose?
Buyer’s excuse (eg, rent apt. for view of event, event cancelled) if seller knew purpose and later, unforeseen event thwarted that purpose
What is a failure of an express condition?
Definition: limits obligations created by other contract language, does not create independent obligation (eg, “as long as”, “provided that”)
Strict compliance required, failure provides excuse but not breach
What is a satisfaction clause measured by?
Measured by reasonable person standard unless contract deals with art or matters of personal taste (eg, house painted, pay $5k if satisfied)
What are the three types of express conditions?
- Condition precedent (if rains July 4)
- Condition concurrent (as long as X)
- Condition subsequent (until X)
When may the excusing of the occurrence of a condition occur?
Occurrence of a condition may be excused by later action or inaction of person protected by condition
Failure to cooperate provides excuse (eg, sell if mortgage at 5%, never tries to get mortgage; must now unconditionally buy house)
Waiver provides excuse (can retract for future payments to extent not relied upon)
