Flashcards in Page 37 Deck (29):
Impossibility of a condition?
Excuses fulfilment if condition is not material part of exchange, if it is, then forfeiture results
What is an example of impossibility of condition?
If insurance company says you have to give notice within two weeks after an accident, but you are in a coma for three weeks, that makes the two-week requirement impossible, and since it isn't material part of exchange, the condition is excused and you have a claim
If non-fulfillment of a condition will cause a disproportionate forfeiture, what usually happens?
Fulfillment is excused unless it was a material part of the exchange
If you have a contract with a settlement company to send your goods, and if there is damage you must give notice of written loss within 10 days after arrival. Your goods get damaged and the company knows it, you note on delivery that there was damage and call them on the phone, but don't give written notice until 25 days later. What happens?
The purpose of the written notice was to tell the company so they could investigate, and they got noticed by the oral claim, so the court will excuse the non-occurrence (to avoid a forfeiture)
What are the four ways a condition can be excused?
A party prevents fulfilment, party waives it, impossibility, disproportionate forfeiture
What is breach?
Party fails to perform a contractual obligation
An actual breach at the time performance is due always allows what?
An immediate cause of action for damages
Does every breach excuse the other party's duty to perform?
No, depends on how major or minor the breach is
What are two ways to breach of contract?
- prevention of a condition
- anticipatory repudiation
What is the reason that the party is not allowed to do anything to prevent the condition from occurring?
Because every contract has an implied duty to act in good faith, so if the party doesn't, that excuses the condition and the party has an absolute duty to perform
What are the two ways that prevention of condition can happen?
Hindering the condition or by inaction
example of prevention of a condition resulting in breach because of inaction?
Agreeing to buy a home conditioned on your ability to get a loan, but if the person didn't apply for a loan, that makes his duty to pay absolute because of his failure to use good faith
What is anticipatory repudiation?
When both parties still have duties to perform, words/conduct by one party that clearly shows he will not perform or doing something that precludes him from performing excuses the condition
What is the reasoning that anticipated repudiation excuses the condition?
Because forcing the innocent party to remain in readiness is unfair
If you do/say something that makes it doubtful you will perform, is that anticipatory repudiation?
When can you request an adequate assurance of performance?
If you are worried because the other party does something that makes it doubtful or unlikely they will perform
What happens if you request an adequate assurance of performance, and no response is given?
You can treat it as an anticipatory repudiation
What are some facts to help decide if a breach is major or minor?
- extent breaching party has performed
- if it was willful, negligent, or innocent
- how much benefit the nonbreaching party will get of what he bargained for
- extent nonbreaching party can be adequately compensated by damages
- degree of hardship on breaching party if breach was material
- if it involves things especially mentioned in the contract as important
If a breach happens at the beginning, is it likely material or not?
If a breach is willful is it likely material or not?
If time, manner, or other important performance details or deviated from, is that likely material or not?
If you promise to pay someone to paint your house by a certain date because a wedding is happening shortly after, delay would be material or nonmaterial?
What is a minor breach?
If there has been substantial performance, it doesn't cancel the contract, but just justifies an action for partial breach, which is a minor breach
If a material breach has happened, what are the options?
Party can choose to cancel the contract or elect to continue and Sue for partial breach
Is failing to finish a "Time is of the essence" contract by the deadline considered material?
Yes, but owner can allow contractor to finish within a reasonable time from election and must pay price, but can get damages for partial breach
Under the UCC if there has been a breach, but the buyer accepts the goods, what must he do?
Give notice of the breach or be barred from any remedy (and if seller is aware of breach because must notify him of potential litigation and it gives him opportunity to cure)
Must you give a reason for rejecting performance?
No, but if you do and you don't state all of the reasons, you are a stopped from asserting the unstated ones later if the other party injuriously relied on the ones you gave
What is estoppel?
When one party changes position as a result of an act of the other party, must be shown by clear and convincing evidence