SP25 Final (2/2)

Question 1

Promises v. conditions

Answer 1

If condition fails to occur, promisor excused from performance.

If breach of a promise, other person gets damages.

If promissory condition fails to occur, the innocent party is both excused from performing and can sue for damages

Question 2

Promissory condition

Answer 2

promise itself that serves as a condition precedent that you substantially perform your promises

Question 3

R234 order of performances

Answer 3

(1) if performance can be given simultaneously, due simultaneously, unless indicated otherwise
(2) if one party’s performance takes time, that party must perform first, unless indicated otherwise

Question 4

R237 effect on other party’s duties of a failure to render performance

Answer 4

Except as stated in R240 (divisibility), it is a condition of As performance that B not materially breach, and it is a condition of Bs performance that A not materially breach

Question 5

R241 When failure to perform is material

Answer 5

1. extent to which injured party will be deprived of benefit reasonably expected
2. extent to which injured party can be adequately compensated for benefit he is deprived
3. extent to which party failing to perform will suffer forfeiture
4. likelihood that party failing to perform will cure his failure
5. extent to which party failing to perform comports with good faith and fair dealing

Question 6

Palmer v. Fox

Answer 6

cts will construe promises to be dependent unless a contrary intention clearly appears

Question 7

Jacob & Youngs v. Kent

Answer 7

need to say “this is an express condition of Kent’s duty to pay” for pipe requirement to be read as a condition

Question 8

UCC duty to pay/perform–perfect tender

Answer 8

don’t need to pay unless you give me exactly when I K for

Question 9

UCC 2-601 Imperfect tender

Answer 9

if goods or tender of delivery fail in any respect to conform to K, buyer may:
1. reject the whole
- UCC 2-602 rejection of goods must be within reasonable time, must seasonably notify seller
2. accept the whole
3. acceot any commercial unit and reject the rest

Question 10

UCC 2-508 Cure by seller of improper delivery/tender

Answer 10

(1) where time for performance has not yet expired, seller may notify buyer of intention to cure and may within K time make conforming delivery
(2) where seller reasonably believes goods are conforming, and buyer rejects, seller can notify buyer and have further reasonable time to substitute conforming tender

Question 11

impossibility

Answer 11

no possible way to perform

Question 12

impracticability R261

Answer 12

when events after formation are so different than the assumptions on which K were based, it would be unfair to hold adversely affected party to K obligations (discharges duties)

mere changes in cost of materials or other, unless abnormal, ≠ impractic

even great depression not enough

Question 13

Death or incapacity R262

Answer 13

if particular person necessary for performance, his death or such incapacity as makes performance impracticable is an event, the nonoccurrence of which was a basic assumption on which K was made.

Question 14

failure of thing necessary for performance R263

Answer 14

if specific thing necessary for performance, its failure to come into existance, destruction, or deterioration as makes performance impracticable is an event, the nonoccurrence of which was a basic assumption on which K was made

Question 15

prevention by govt regulation or order R264

Answer 15

if performance of a duty made impracticable by domestic or foreign law or order, law or order is an event, the nonoccurrence of which was a basic assumption on which K was made

Question 16

frustration of purpose

Answer 16

extension of impracticability doctrine that developed to provide relief when an unexpected supervening event destroys value of transaction (underlying purpose was frustrated). No point to continuing to perform

Krell v. Henry–> coronation case

fore majeure clause- allocate risk of supervening events

Question 17

UCC 2-615 excuse by failure of presupposed conditions

Answer 17

increased costs not enough

Question 18

Existing impracticability or frustration R266

Answer 18

if at the time K was made, party’s performance under it is impracticable/substantially frustrated without his fault bc of fact he has no reason to know and non-existance is a basic assumption underlying K–> no duty to render performance

Question 19

anticipatory repudiation, generally

Answer 19

one party, before performance is due, clealy communicates their intention not to fulfill their contractual obligations (breach before performance)

Question 20

R250 when a statement is a repudiation

Answer 20

1. an express repudiation is a statement by the obligor indicating obligor will commit a breach that would itself give the other a claim for damages for total breach
2. an implied repudiation is a voluntary affirmative act which renders obligor unable or apparently unable to perform without such breach

Question 21

R251 when failure to give assurance is repudiation

Answer 21

(1) where reasonable grounds arise to believe the obligor will breach, obligee may demand adequate assurance of due performance and may, if reasonable, suspend performance for which he has not already received agreed exchange until he receives such assurance
(2) may treat failure to assure within reasonable time as repudiation

Question 22

R256 retraction of repudiation

Answer 22

can retract repudiation unless other party has accepted (cancelled K) or materially changed position on repudiation

Question 23

UCC 2-610 Anticipatory repudiation

Answer 23

when either party repudiates with respect to performance not yet due, aggrieved party may:
1) wait for performance for commercially reasonable time
2) resort to any remedy, even thoug he has notified repudiating party he would await performance
3) in either case, suspend his own performance

Question 24

UCC 2-610 adequate assurance

Answer 24

A K for sale imposes an obligation on each party that the other will receive due performance. When reasonable grounds for insecurity arise, the other party may IN WRITING demand adequate assurance of due performance, and until he receives it, if com reasonable, may suspend performance

After receipt of justified demand, failure to provide within reasonable time (no more than 30 days) such assurance is repudiation

Question 25

R 2-611 retraction of anticipatory repudiation

Answer 25

Until performance is due, can retract repudiation unless other party has **cancelled** or **materially changed position**, or **otherwise** **indicated** he considers repudiation **final**

Question 26

Taylor v. Johnston

Answer 26

party faced with anticipatory breach may 1) terminate agreement and **immediately seek damages**, or 2) ignore the repudiation and **wait** until actual breach before seeking damages (but must accept subsequent valid performance despite repudiation)

Question 27

specific performance generally

Answer 27

specific performance is largely a discretionary remedy to prevent substantial injury where **no adequate remedy at law to protect expectation interest**

Question 28

Effect of adequacy of damages

Answer 28

if damages adequate--> no specific performance.

Question 29

factors to determine **whether damages are adequate **

Answer 29

1. difficulty of **proving damages** with **reasonable certainty** 2. difficulty of procuring suitable **substitute performance** 3. likelihood damage award **could not be collected**

Question 30

UCC 2-716 specific performance

Answer 30

may be decreed where goods are unique or in **other proper circumstances** - output/requirement Ks - cannot purchase substitute goods

Question 31

Arguments for and against specific performance

Answer 31

For: 1. parties don't need to prove damages 2. **avoid costly trial**, likely errors in estimating damages 3. goods services are **unique** 4. damages too **uncertain or inadequate** Against 1. damages adequate 2. too much judicial supervision 3. K terms too uncertain for SP 4. K is unfair (formation defenses) 5. involuntary servitude 6. efficient breach--> ct not gonna do SP if more economical to breach *promise to render personal service will not result in SP

Question 32

expectation damages

Answer 32

try to put nonbreaching party in same position as they would have been in had K been carried out: **= direct loss + incidental/consequential loss - costs saved**

Question 33

direct loss

Answer 33

**value** that would have come **from breaching party's performance**

Question 34

incidential loss

Answer 34

costs incurred **coping** with breach

Question 35

consequential damages

Answer 35

not related directly to value of K itself (lost sales) *must be ascertainable, foreseeable, unavoidable

Question 36

Buyer's cover

Answer 36

May cover by making purchase of substitute goods in **good faith w/o unreasonable delay** (cost of cover-K price) + incidental/consequential - expenses saved

Question 37

buyer's damages for non-delivery/repudiation

Answer 37

(market price - K price) + incidential + consequential - expenses saved

Question 38

Seller's resale

Answer 38

(K price - resale price) + incidental - expenses saved

Question 39

seller's damages for non-acceptance or repudiation

Answer 39

(K price - market price) + incidental - expenses saved [lost volume] if this is inadequate, measure of damages is profit from full performance (K price) + incidental damages

Question 40

Avoidability [mitigation]

Answer 40

(1) damages not recoverable for loss that the injured party **could have avoided without undue risk, burden, or humiliation** (2) where injured party made **reasonable but unsuccessful efforts--> not precluded** *anticipatory repudiation--> no duty to mitigate damages until damages accrue (date performance is due)

Question 41

Consequential damages for buyer

Answer 41

any loss resulting from **general or particular requirements** **and needs** of which seller **at time of K had reason to know**, and which could not be **reasonably prevented by cover**; and injury resulting from breach of warranty

Question 42

unforeseeability

Answer 42

(1) cannot recover for loss that party in breach did not have reason to foresee when K was made (2) loss may be foreseeable as a probable result when it follows from breach in - **ordinary course of events**, or - as a result of **special circumstances** that party in breach had **reason to know**

Question 43

Uncertainty

Answer 43

damages not recoverable for loss **beyond** an amount that **evidence establishes with reasonable certainty**

Question 44

Lost volume

Answer 44

if seller would have made two sales in absence of As breach, seller can get lost profits from the sale to A (unlimited supply, limited demand)

Question 45

Alternatives to loss in value of performance

Answer 45

If breach results in **defective or unfinished construction** and the **loss in value to the injured party is not proved with sufficient certainty**, he may recover damages based on a) **reasonable cost of completing performance or remedying defects** if cost not clearly disproportionate to probable loss in value to him, or b) **diminution in market price** of property caused by breach

Question 46

Factors cts consider for whether diminution of value should apply

Answer 46

1. whether cost of completion **grossly disproportionate** 2. whether nonconformity **accidental** or **willful** 3. **subjective**/**objective** value 4. **centrality** of omission/breach to og agreement

Question 47

Divisibility

Answer 47

if performances can be **apportioned into corresponding pairs** of part performance so that the **parts of each performance are regarded as agreed equivalents**, party's performance of his party of pair has same effect on other's duty to render performance as it would have **if only that pair of performances had been promised**

Question 48

liquidated damages

Answer 48

damages pre agreed on in K. UCC and R both allow damages to be liquidated but **only at amount that is reasonable in light of anticipated or actual loss caused by breach** **and difficulties of proof of loss**. A term fixing **unreasonably large** liquidated damages is **unenforceable** on grounds of PP/ **void** as penalty | UCC allows default remedies to spring back to life

Question 49

emotional damages

Answer 49

recovery for emotional disturbance will be excluded unless breach also **caused bodily harm** or breach is of such a kind that **serious emotional disturbance** was a **particularly likely result** - e.g. carriers and inkeepers with passengers and guests, carriage dead bodies, notification of death, *Plotnick*--> K where express object **is mental well-being of one of the parties**

Question 50

Assignment

Answer 50

transfers rights under K, **extinguishes** rights of assignor

Question 51

K can be assigned unless

Answer 51

1) assignment would **materially change duty of obligor**, or **materially increase burden/risk** 2) assignment **forbidden** by statute or against PP 3) **precluded** by K

Question 52

Delegation

Answer 52

transfers duties under a K. **Does not extinguish** the duties/liabilities of delegator

Question 53

delegation UCC/R

Answer 53

1) can delegate unless **against PP, promise says otherwise** 2) unless **substantial interest in having og** promisor perform | can agree to discharge duty of delegator

Question 54

intended beneficiary

Answer 54

Letting them be an intended beneficiary **fits** with what the parties were trying to **accomplish** and either: - the K is meant to **pay off a debt** the promisee owes to the third party or - the promisee clearly **meant to give** the third party a **benefit** from the L

Question 55

incidental beneficiary

Answer 55

one who is not an intended beneficiary, acquires no right against promisor or promisee

Question 56

Installment K UCC

Answer 56

(1) an installment K is one which **requires delivery of goods in separate lots** to be separately accepted (2) buyer may reject any nonconforming installment **if the nonconformity substantially impairs the value of that installment AND cannot be cured** or if the nonconformity is a defect in the required documents; but if the nonconformity does not fall within (3) [impairs value of whole K or reinstates] and the seller gives **adequate assurance** of its cure, buyer **must accept that installment** (3) if nonconformity impairs value of K as a whole = breach. Aggrieved party reinstates if he **accepts** nonconforming installment **w/o** seasonably **notifying** of cancellation or he brings an action for past installments or demands performance as to future installments