Flashcards in Page 44 Deck (10):
What is perspective inability?
Death or illness of someone whose performance is necessary. The aggrieved party can change position and his obligations are discharged, but the other party is not guilty of breach (unless the inability is the party's own fault, then that is an anticipatory breach)
If a seller of real property doesn't have title when the contract is made, what happens?
It can cause perspective inability to perform, unless he has the right to get title, a justified expectation of becoming the owner by the time of performance, or the other party knew about the lack of title when the contract was signed
If one party discovers that the other party is insolvent, what can they do?
Refuse delivery of except for cash
What is prospective unwillingness?
When someone chooses not to fulfill their obligation which is a failure of the condition and repudiation. Ie: actress contracted to be in a play, but got a part in a movie, so she chooses not to do the play
What is a retraction?
When repudiating party retracts the repudiation before the date set for performance if there hasn't been any detrimental reliance. It reinstates the repudiating party's rights and allows for resulting delays. Can be written, oral, an act, but must come to the attention of the other party
What are the three possible responses to an anticipatory repudiation?
- Bring an action for total breach of other party was ready, willing, and able to perform
- urgent/insist on the other party's performance
- ignore the repudiation and proceed with performance (modernly: duty to mitigate damages so can't continue to perform if it would enhance damages). UCC: can wait for performance for a commercially reasonable time, but not beyond that because of duty to mitigate
What are damages for anticipatory breach?
- repudiation by buyer: difference between contract price and market price at time of tender
- breach by seller: buyer can cover or get damages for the difference between market price at time buyer learned of the great and contract price
Common law: duty to mitigate damages
What does cover mean?
Make a good-faith purchase of the replacement of goods within a reasonable time
What is a reasonable time when it comes to cover?
Time necessary for buyer to find alternative source of supply in the market