Performance & Excuse of Nonperformance

Question 1

Under common law, a party’s basic performance duty is to…

Answer 1

substantially perform all that is called for in the contract.

Question 2

Article II generally requires a performance of…

Answer 2

perfect tender.

Question 3

Installment contracts require…

Answer 3

a delivery of goods in separate installments over a specified period.

Question 4

Under Article II, a buyer has a reasonable opportunity to…

Answer 4

inspect the goods within a reasonable time.

Question 5

Conditions do not create their own obligations, instead, they …

Answer 5

limit obligations created by contract language.

Question 6

(True/False): Express conditions must be perfectly satisfied.

Answer 6

TRUE.

Question 7

The failure of a condition to a contract is not a breach of contract, but it….

Answer 7

discharges the liability of the promisor whose obligations on the conditional performance never mature.

Question 8

Satisfaction performance conditions are construed to the…

Answer 8

reasonable person standard.

(except in situations of personal taste)

Question 9

A condition precedent is one that must occur…

Answer 9

before an absolute duty of immediate performance arises in the other party.

Question 10

To waive a condition without giving consideration, the condition must be…

Answer 10

ancillary or collateral to the main subject and purpose of the contract to be effective.

Question 11

In the case of an anticipatory repudiation, the nonrepudiating party has (4) alternatives:

Answer 11

1. Treat the anticipatory repudiation as a total repudiation and sue immediately;
2. Suspend their own performance and wait to sue until the performance date;
3. Treat the repudiation as an offer to resind and treat the contract as discharged, or
4. Ignore the repudiation and urge the prominsor to perform.

Question 12

A repudiating party may withdraw their repudiation unless the other party has:

Answer 12

1. Cancelled;
2. Materially changed their position in reliance on the repudiation; or
3. Otherwise indicated they consider the repudiaiton final.

Question 13

Prospective failure of a condition is distinguishable from repudiation because…

Answer 13

repudiation must be unequivocal, whereas prospective falure merely raises doubts that a party will perform.

Question 14

A prospective failure allows the innocent party to suspend further performance until…

Answer 14

they receive adequate assurances that performance will be forthcoming.

assurance not received = anticipatory repudiation

Question 15

Recission is…

Answer 15

a party’s mutual agreement to cancel a contract.

(parties must have at least some performance remaining to effect)

Question 16

If a contract is subsequently modified by the paties, this will serve to…

Answer 16

discharge the terms of the original contract that are the subject of the modification.

(will not serve to discharge the entire contract)

Question 17

An accord is an agreement to…

Answer 17

accept a different performance to satisfy an existing duty.

Question 18

An accord, taken alone, won’t discharge the prior contract, it merely…

Answer 18

suspends the right to enforce it with the terms of the accord contract.

Question 19

Satisfaction of the performance of the accord agreement effects to discharge…

Answer 19

the original contract and the accord contract.

Question 20

Look for these words to determine if an accord + satisfaction situation is present:

Answer 20

“If…. then”

Question 21

A novation is an agreement to…

Answer 21

substitute a new party for an existing party.

Question 22

The elements for a valid nocation are:

Answer 22

(1) a previous valid contract; and

(2) an agreement among all parties, including the new party to the new contract;

(3) the immediate extinguishment of contractual duties as between the original contracting parties; and

(4) a valid and enforceable new contract.

Question 23

Death or the physical incapacity of a person necessary to effectuate the contract serves to…

Answer 23

discharge it.

Question 24

Impossibility must be “objective,” such that …

Answer 24

the duties of the contract could not be performed by anybody.

Question 25

A contract is not discharged by the death or incapacity of the person who was to perform the services if the services are of a kind…

Answer 25

that can be delegated.

Question 26

If performance of a contract becomes illegal by subsequent government regulation, performance will be…

Answer 26

excused.

Question 27

Under the common law, if the contract’s subject matter is destroyed or the designated means for performing the contract are destroyed…

Answer 27

contractual duties will be discharged.

Question 28

Under Article II, if performance has become impossible or commercially impracticable, the seller will be discharged…

Answer 28

to the extent of the impossibility or impracticability.

Question 29

Under Article II, events sufficient to excuse performance do NOT include…

Answer 29

mere increases in costs, unless they change the entire nature of the contract.

(must be extreme & unreasonable to perform)

Question 30

Frustration of a contract will occur if…

Answer 30

the purpose of the contract has become valueless by virtue of some supervening event, not the fault of the party seeking discharge.

Question 31

The elements necessary to establish frustration of purpose are:

Answer 31

(1) supervening act or event leading to the frustration;

(2) the act or event was not reasonably foreseeable at the time of entering the contract;

(3) the purpose of the contract has been completely/almost completely destroyed by the act or event;

(4) the purpose of the contract was realized by both parties at the time of making the contract.

Question 32

A contract that lapses discharges a contact, while running the statute of limitations merely…

Answer 32

makes the contract unenforceable in court.