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Question 1

What are the different ways a discharge of condition can happen?

Answer 1

• mutual rescission
• release
• accord and satisfaction
• payment in full check

Question 2

Is mutual rescission considered binding?

Answer 2

Yes, because both parties surrender their right to the other’s performance

Question 3

If one party has completed performance, can mutual rescission apply?

Answer 3

No, because mutual rescission must involve both parties giving up a right

Question 4

Must mutual rescission be in writing?

Answer 4

Only if it is for an interest in land or sale of goods under the SOF

Question 5

How can the maker of a contract get a release that extinguishes the contractual rights in his favor?

Answer 5

By using adequate consideration

Question 6

Must a written release always have new consideration?

Answer 6

No, many states say it is effective without new consideration because a writing is a substitute for consideration

Question 7

What does the UCC say about releases?

Answer 7

Duties can be discharged by a written release that is signed and delivered even without consideration

Question 8

What are the two types of breach?

Answer 8

Anticipatory and present

Question 9

What is anticipatory breach?

Answer 9

Party entitled to the condition repudiates before performance by clearly indicating he will not perform. This excuses the condition and the person is immediately liable for breach, and the innocent person can bring an immediate action for the entire value of the promised performance.

Question 10

Can there be an anticipatory breach if the innocent party has already fully performed and is just waiting for the date performance will be due?

Answer 10

No

Question 11

Is a good faith repudiation where a party states honorable motives for not performing OK?

Answer 11

Good faith is immaterial. Performance is judged by an objective test.

Question 12

Anticipatory breach accelerates the breach to what moment?

Answer 12

To the moment of repudiation and allows the person to immediately sue

Question 13

Under the UCC, what are damages for anticipatory breach?

Answer 13

The difference between market value at the time plaintiff learned of the breach and the contract price.

Question 14

What are the three actions that create an anticipatory breach?

Answer 14

• unequivocal statement that party will breach
• transfer of essential item for performance to someone else
• voluntary act that makes performance impossible

Question 15

If a repudiation happens at the same time as non-performance, is that anticipatory repudiation?

Answer 15

No, that is present repudiation and a breach

Question 16

What are the two ways to repudiate a contact?

Answer 16

Express and by conduct

Question 17

If you express doubt, is that a repudiation?

Answer 17

No

Question 18

How can you expressly repudiate a contract?

Answer 18

Reasonably clear and sufficiently positive communication to the other party that you are repudiating

Question 19

How do you repudiate a contract by conduct?

Answer 19

Do an act that prevents performance

Question 20

If you agree to buy someone’s car if you can get financing, but while that is pending, you file for bankruptcy, what has happened?

Answer 20

You have repudiated the contract by conduct, because filing for bankruptcy prevents the financing, which excuses all conditions and accelerates the breach

Question 21

What is needed in order to make an adequate assurance of performance request under the UCC?

Answer 21

Must have reasonable grounds to think that tender will not be made

Question 22

How much time does a person have to respond to a request for adequate assurance of performance?

Answer 22

A reasonable time that is not more than 30 days

Question 23

If you make a request for adequate assurance of performance under the UCC, what can you do until you get an answer?

Answer 23

Suspend performance

Question 24

If a party indicates through words or actions that he doesn’t intend to perform, what can the other party do?

Answer 24

He can bring an immediate suit, or if it is a total breach, he can terminate the contract.

But if the aggrieved party has completely performed, and repudiation happens, he can’t sue until the time for the other’s performance has passed.

Question 25

If the non-repudiating party has already completed performance, why does anticipatory breach not apply?

Answer 25

The innocent party just has to wait to sue until there is an actual breach.