Performance, Breach, & Discharge

Question 1

Condition Precedent

Answer 1

Makes performance conditional upon completion of the condition

Occurrence of a condition may be excused by a condition.

May be excused if 1) protected party doesn’t make good faith effort to satisfy condition or 2) protected party voluntarily waves condition. Can retract waiver for future conditions to extent other party hasn’t relied on waiver

Question 2

Frustration of Purpose

Answer 2

Discharges performance if purpose of contract no longer exists.

Performance excused if:

1) principal purpose is substantially frustrated
2) unforeseeable supervening event and
3) both parties knew purpose at time of formation

Question 3

Impracticability

Answer 3

Performance discharged as impractical when

unanticipated event occurs after formation that makes performance extremely/unreasonably difficult or expensive

Question 4

Minor Breach (Substantial Performance Doctrine)

Answer 4

Minor breach doesn’t excuse performance by non-breaching party (but may still bring separate action for damages).

Question 5

Material Breach

Answer 5

Material breach excuses nonbreaching party’s performance.

Occurs when a party doesn’t render substantial performance. To determine material breach, court will consdier:

1) extent of benefit deprived
2) adequacy of compensation
3) hardship
4) likelihood that breaching party will cure, and
5) absence of GF/fair dealing

Question 6

UCC Perfect Tender Rule

Answer 6

Seller must deliver perfectly conforming goods, otherwise buyer may reject all or a portion of the goods.

Rejection must be made within a reasonable time after delivery/tender

Question 7

Exceptions to Perfect Tender Rule

Answer 7

1) Seller’s Right to Cure
- performance period hasn’t expired yet, OR
- seller is allowed reasonable time to substitute tender if there’s reasonable grounds that goods would be accepted

2) Installment Contracts
- May only be cancelled where installment is so defective that it substantially impairs value of entire contract.
- Buyer can reject only if if substantial impairment + time to cure passed

Question 8

Anticipatory Repudiation

Answer 8

Occurs when a party unequivocally states that they are unwilling or unable to perform.

Party can retract repudiation unless aggrieved party has 1) cancelled, 2) materially changed its position, or 3) indicated he considers repudiation final.

Nonbreaching party can 1) treat K as repudiated & sue for damages, 2) treat K as discharged, 3) wait for perfomance deadline & then sue, or 4) urge party to perform

Question 9

Adequate Assurances

Answer 9

If a buyer has reasonable grounds for insecurity, it may request from the seller in writing adequate assurances. Seller’s failure to do in a reasonable time so will be treated as anticipatory repudiation.

Question 10

Time is of the Essence

Answer 10

Even when dates are included in contracts, courts don’t construe time to be of the essence unless otherwise clearly stated