Flashcards in Page 41 Deck (21):
What are the elements of impossibility?
- identified goods
- risk of loss
What does "identified goods" mean?
Subject matter of contract must be specifically identified
What is casualty to identified goods?
Specifically considered goods in a contract get destroyed. Ie: I agreed to buy your golf clubs, but they get wrecked. If instead I ordered clubs from a company, no specific ones are identified, so they don't become identified goods until the company ships them, or tags them to identify them as yours
How does risk of loss work in face-to-face transactions?
- seller is merchant: buyer must get physical possession for risk to pass
- seller is nonmerchant: seller must tender delivery of goods (make them available for a reasonable time with notice of their availability) for risk to pass
If you buy a computer, and tell them you will come back in an hour to pick it up, but the store burned down, who owned the item and had the risk of loss?
The store still owned it because you weren't in physical possession and the seller was a merchant, so your duties are discharged
If you made an agreement to sell someone your laptop, and tell the guy to pick it up on Saturday afternoon, but your apartment burns down Saturday night, who has the risk of loss?
Because the seller is not a merchant, the risk of loss is on the buyer because the goods were available to him for a reasonable time with notice of their availability and the seller completed his duty
What are the three views on risk of loss for damage to property?
- majority: risk is on purchaser because once the contract is made he is the owner
- Minority: seller is legal owner
- UVPRA: risk of loss is on purchaser that is in possession or has legal title
What is impracticability?
Performance of an obligation is not impossible, but is extremely difficult or risky and contingency was unforeseeable
What are the possible responses to impracticability?
Can terminate and discharge the contract, or modify it with a substitution
To have impracticability, you need what?
Extreme or unreasonable difficulty, expense, injury or loss, etc.
Are small increases in expense of performance considered impracticability?
No, because a party assumes the risk of increase within a normal range. But severe shortages, crop failure, unforeseen shut down, that cause a large increase in price can be impracticability
If an event or condition existed at the time of formation, but the party didn't know or couldn't have known, can impracticability still discharge the duty?
What are the two views on failure of contemplated mode of performance?
- common law: doesn't matter if just minor like mode of delivery, Then can make a commercially reasonable substitute, but if you central to the contract, no substitute
- UCC: if means/manner of payment fails, seller can withhold or stop delivery unless buyer gives a payment that is substantially equivalent
What happens if performance is only partially impracticable?
- CL: The rest of performance that isn't more difficult must be performed, and the other party must except it with an appropriate offset
- R2: must find a substitute and substantially perform rest of contact
If a contractor agrees to build a house using a certain kind of pipes, but that product goes out of business, what is his duty?
His duty to use that kind of pipe is excused, but he still has a duty to build a house and use a substituted pipe, and owner must pay for the house subject to be offset for the change in pipe
If either party had already given part performance before circumstances caused impracticability, what can a party get?
Restitution of the reasonable value of his performance, and if any party relies, he can get reliance damages as justice requires
What are the two types of technological impracticability?
Technological breakthroughs, and unforeseen possibilities
If a contract is made to make a new product or use a new process, but existing technology makes that impossible, what is the result?
Contractor assumed the risk because he knew the limits of existing technology
What are the elements to prove impracticability under the UCC?
- Event changed basic assumption of both parties
- event made performance impossible or impracticable (need extreme unreasonable difficulty)
- party using the defense didn't assume the risk
If impracticability was president when an agreement was made, what was the party show in order to prove impracticability?
That he didn't have reason to know the facts (if he did have knowledge, that would create an assumption of the risk)