II. Discharge

Question 1

Impracticability

Answer 1

Available if: performance becomes illegal after K is made, specific subject matter of K is destroyed, performing party to K dies or becomes incapacitated (personal services) or performance becomes impracticable.

Elements: unforeseeable event has occured, nonoccurence of which was a basic assumption of the K, and party seeking discharge is not at fault.

Assumption of risk: impracticability not available to a party who assumes the risk

Partial impracticability: if seller is able to deliver some of the goods, they must be apportioned among all the buyers w/ whom the seller has contracted.

Buyer may refuse to accept and may cancel K

Failure of a particular source: if K specifically identifies a source, and source of supply fails, performance discharged even if other sources are available.

Question 2

Frustration of Purpose

Answer 2

Applies when unexpected events arise that destroy one party’s purpose in entering into K, even if performance of K is not impossible

Frustrated party entitled to rescind K w/out paying damages.

Unexpected even need not be completely unforeseeable, but must be so severe its not within the assumed risks inherent in the K.

Question 3

Rescission

Answer 3

Cancelling of K so as to restore parties to their position before K was made.

Parties may seek to rescind for a variety of reasons but grounds for rescission must have existed at the time the K was made.

Rescission also possible by mutual agreement of the parties, surrender rights under original K is consideration for the rescission.

Third party beneficiaries: K not discharged by mutual rescission if third party rights have already vested.

Question 4

Release

Answer 4

Writing that manifests intent to discharge another party from existing duty

CL: release must be supported by consideration

UCC: written waiver or renunciation signed/delivered by aggrieved party is enough

Question 5

Destruction/damage to identified goods

Answer 5

Destruction: goods identified when K made are destroyed through no fault of either party before the risk of loss passes to buyer; K is avoided, both parties are discharged and neither party is in breach.

Goods damaged but not destroyed: K avoided or buyer can choose to take goods at reduced price w/out any other claim against seller

Risk of loss: if risk of loss has passed to buyer, K is not avoided and seller may demand performance by buyer.