Page 38 Flashcards
If an express condition is strictly enforced, sometimes it leads to forfeiture and unjust enrichment, so what do courts do to prevent this?
They will excuse the condition to prevent a forfeiture as long as it isn’t an essential part of the exchange. They balance the equities, consider the ethical positions, the injury suffered, and the materiality of the condition. Key: avoiding disproportionate forfeiture in relation to unconscionability
What are the three types of satisfaction?
- personal
- reasonable person
- third-party
In what types of cases do you deal with satisfaction contracts?
Service contracts
What is personal satisfaction?
Subjective standard where promisor is the sole judge of quality and has the right to reject the work, if in good faith
Are personal satisfaction issues reviewed by a court?
Only if a party acted in bad faith
What is satisfaction of a reasonable person?
Objective standard where performance only needs to be reasonably satisfactory, and refusal by promisor is subject to court review
What is an example of satisfaction of a reasonable person contact?
Refurbishing an item: satisfaction can be measured by a reasonable person. Personal satisfaction is irrelevant if a reasonable person would have accepted and approved of the performance
What is satisfaction of a third person?
Contract provisions that condition one party’s payment on the personal satisfaction of a professional. Strict compliance is required unless the expert acted in bad faith or unreasonably (which excuses the condition).
What are examples of people that satisfaction of a third-party would be based on?
Architect, engineer, lawyer, etc. The contract relies on that professional’s integrity
What is the only time that courts can review satisfaction of a third-party?
If the decision was fraudulent, capricious, made in bad faith, or there’s not enough evidence to support it
In a satisfaction contract, what must be proven to negate that good faith was present?
Plaintiff must show defendant was actually satisfied but had other motives for rejecting performance
What happens in a satisfaction contract if the person rejects the work in bad faith?
The condition of satisfaction is excused
