VII: Conditions and Performance

Question 1

Condition

Answer 1

Future event that must take place before rights or obligations are created.

Question 2

Failure of a conditions

Answer 2

Relieves a party from the obligation to perform

Question 3

Express K

Answer 3

Condition that must be complied w/ fully unless excused; substantial performance will not suffice

Question 4

Implied

Answer 4

Those deemed part of a K because agreement suggests that parties truly intended the condition but failed to expressly include it, or because fairness requires its inclusion

Only need substantial performance to satisfy and implied condition.

UCC implies duty of cooperation when performance of one party depends on the cooperation of the other party.

Question 5

Timing of conditions

Answer 5

Condition precedent: condition precedes obligation to perform

Condition subsequent: condition excuses the duty to perform after a particular event

Concurrent conditions: each party’s duty to perform is conditioned on the other party’s duty to perform (must perform simultaneously)

Question 6

Satisfaction of conditions

Answer 6

Examined against objective; reasonable person standard unless aesthetic taste involve then subjective standard and party must use GF.

Question 7

Order of performance

Answer 7

Unless language or circumstances indicate otherwise,

When 1 party’s performance requires a period of time: that party must complete his performance before the other party is required to perform.

When both parties performance can be rendered at the same time: both parties must perform at the same time; one party’s failure to perform excuses the other party’s performance.

Question 8

Express condition precedent

Answer 8

Parties are generally held strictly to the condition; full compliance is required before the other party’s performance is due.

Question 9

Implied or constructive condition precedent

Answer 9

a party who substantially complies w/ the condition can trigger the other party’s obligation to perform.

Question 10

Damages

Answer 10

K price minus any amount it will cost party to obtain complete performance as promised.

Even if no substantial performance, potential recover through restitution

Failure to substantially perform is a material breach

Question 11

Willful breach

Answer 11

More likely to be treated as material breach

Question 12

Perfect tender under the UCC

Answer 12

Seller must transfer ownership and tender goods conforming to warranty obligations. Must be in conformance w/ K provisions or UCC if silent.

Buyer may inspected goods and, upon acceptance, has an obligation to pay for them

Perfected tender rule: substantial performance insufficient (except installment Ks)

Question 13

Transferring ownership under the UCC

Answer 13

Automatic warranty of good title, rightful transfer, and goods free of security interest of which buyer is unaware

Actual knowledge of interes nullifies warranty

Question 14

Tender at seller’s place of business

Answer 14

Seller’s place of business: seller must place goods at the disposition of the buyer and give the buyer notice, if necessary.

Question 15

Shipment K

Answer 15

F.O.B. seller’s place of business: seller must deliver goods to a carrier and make a K for their shipment by 3rd party carrier.

Question 16

Destination K

Answer 16

F.O.B. buyer’s place of business: seller must deliver goods to place specified in K and tender them there by holding them at the buyer’s disposition.

Question 17

Buyer’s obligations when conforming tender

Answer 17

Buyer obligated to accept and pay K price, rejection amounts to breach.

Buyer has a right to inspect goods that are tendered, delivered, or identified in K for sale, unless K provides otherwise.

Question 18

CL Divisible or installment K

Answer 18

Units of performance are divisible into distinct parts

Recovery limited to amount promised for the segment of K performed

Damages recoverable for breach of other segments

Question 19

UCC Divisible or Installment K

Answer 19

Goods delivered in multiple shipments, each separately accepted.

Perfect tender doesn’t apply
Right to reject determined by substantial conformity standard: buyer can only reject if nonconformity substantially impairs value to buyer and cannot be cured

Buyer may cancel K only if nonconforming tender substantially impairs value of entire K

Question 20

Waiver

Answer 20

Party whose duty is subject to condition can waive a nonmaterial condition by words or conduct;

the condition can be reinstated if: the waiving party communicates the retraction of the waiver before the condition is due and the other party has not suffered detrimental reliance.

Question 21

Wrongful interference

Answer 21

If party whose duty is subject to a condition wrongfully prevents or interferes w/ occurrence of that condition, then the condition is excused and the interfering party has an absolute duty to perform. Per implied duty of GF and fair dealing.

Question 22

Election

Answer 22

A party who chooses to continue with a K after a condition is broken effectively waives the condition.

Question 23

Estoppel

Answer 23

Once a party waives condition, he can be estoppped from using that condition as a defense if other party reasonably relied on waiver