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Conditions & Performance Flashcards

(53 cards)

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1
Q

What is a condition ?

A

A future event that must take place b/f rights or obligations are created, destroyed, or enlarged

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2
Q

What is the effect if a condition fails?

A

Failure of a condition relieves a party of the obligation to perform

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3
Q

What is an express condition ?

A

Condition is express in the K

  • Includes words such as “on the condition that” or “provided that”
  • Condition must be complied with fully unless excused, subst. perf. is not enough
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4
Q

What is an implied condition?

A

Those deemed to be part of K b/c the agreement suggests:

  • the parties truly intended the cond. but failed to expressly include it OR
  • b/c fairness requires its inclusion

Only subst. perf. is required to satisfy the condition

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5
Q

What are the 2 types of failed implied conditions?

A
  1. Substantial Performance AND
  2. Material Breach
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6
Q

When is the failure of an implied condition a material breach?

A
  • Breach is serious enough or
  • Performance is so bad

Court will treat the breach in the same way it would treat a failure of an express conditon

  • Aggrieved party is discharged from his own perf. oblig.
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7
Q

When does failure of an implied condition result in substantial performance ?

A

Breach is not serious

  • Court will treat party’s perf. as subst.
  • Aggrieved party won’t be discharged from his own perf. oblig.
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8
Q

What is a condition precedent ?

A

Condition precedes the obligation to perform

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9
Q

What is a condition subsequent ?

A

Condition excuses the durt to perf. after a particular event occurs

  • Exists only with respect to a duty that is absolute
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10
Q

What is a concurrent condition ?

A

Each party’s duty to perf. is conditioned on the other party’s duty to perf.

  • Requires each party to perf. simultaneously
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11
Q

Burden of Proof - Defendant’s duty is subject to Condition Subsequent

A

Plaintiff has the burden of proving that the condition occurred in order to recover it

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12
Q

Burden of Proof - Defendant’s duty is subject to a condition subsequent

A

Defendant must prove the happening of the condition to avoid liability

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13
Q

How is it determined if a Conditon is satisfied?

A

Objective Reasonable Person Standard - Whether a reasonable pers. would be satisfied

  • Unless, aesthetic taste is of a party is a condition of satisfactory perf.
    • Satisfactory determined under subj. std.
    • Party must use good faith or claim of dissatisfaction can be a breach
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14
Q

Order of Performance When one party’s perf. requires a period of tiem

A

That party must complete his perf. b/f the other party is required to perform

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15
Q

Order of performance when both parties performance can be rendered at the same time

A
  • Both parties must perf. at the same time
  • One party’s failure to perform excuses the other party’s performacne
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16
Q

Substantial Performance of an Express Condition Precedent

A

Parties are held strictly to the cond.

  • Full compliance is required b/f the other party’s performance is due
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17
Q

Substantial Performance of an implied or constructive condition precedent

A

A party who subst. complies with the cond. can trigger the other party’s obligation to perform

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18
Q

What is the effect of substantial performance on Damages ?

A

The Doctrine of Substantial Performance permits a party who subst. perf. to recover on the K even if the party didn’t render full perf.

  • Can recover K Price ( - ) any amount it will cost the other party to obtain complete perf. as promised
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19
Q

What is the result of a parties failure to substantially perform?

A

Failure to Subst. perform is a material breach

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20
Q

What is the effect on damages if a party fails to subst. perform?

A

A party who hasn’t subst. performed gen. can’t recover damages based on the contract

  • BUT she may be able to recover through restitution
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21
Q

What is the effect of willful breach?

A

When a party intentionally furnishes services that are materially different from what he promised

  • Breach is more likely to be treated as a material breach
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22
Q

What is the effect of a delay in performance ?

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A

Suspends the duty that is conditioned on that performance

  • doesn’t prevent the performance of that duty from being substantial performance
  • May be material breach or may be considered substantial performance
23
Q

Delay in Performance & Time is of the Essence Clause

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A

Doesn’t auto. give the other party the right to refuse to perform

24
Q

What 5 factors are used to distinguish b/w a material breach and a substantial performance ?

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A
  1. Extent aggrieved party will be defprived of ben. she reas. expected to get under the K
  2. Extent aggrieved party can adequately be compensated by damages for defective perf.
  3. Extent breaching party will suffer forfeiture if material breach found
  4. Likelihood breaching party will cure his failure
  5. Extent the breach was willful or in bad faith rather than merely neg. or innocent
25
Perfect Tender Rule under the UCC
UCC requires perfect tender, subst. performance is not sufficient (except installment K & when parties agree) * Terms of K are enforced exactly * Seller - must transf. ownership & tender goods conforming to warranty oblig. * Buyer - May inspect goods & upon acceptance, has oblig to pay for them
26
Perfect Tender Rule - Transfer of Ownership
UCC implies warranty of title - provides that the seller auto. warrants that: 1. Conveying good title 2. transfer is rightful 3. Goods are delivered free from any security interest that the buyer has no knowledge of at the time of the K * Actual knowledge of buyer nullifies the warranty of title
27
Perfect Tender Rule - Seller's Obligation to Tender Goods
Seller must tender goods in accordance with the K provisions or in accordance w/ UCC if K is silent on tender * _Time of tender_ - w/in reas. time after k is made * _Manner of tender_ - delivered in 1 delivery * Or if circ. give either party right to make or demand delivery in lots * _Place of Tender_ - Seller's place of bus. (or residence if no place of bus.
28
What are the 4 methods of Tender ?
1. Seller's Place of Business 2. Shipment Contract 3. Destination Contract 4. Goods in the hand of a bailee
29
Method of Tender - Seller's Place of Business
Seller must place goods a the disposition of the buyer & give buyer notice if necessary to enable buyer to take delivery
30
Method of Tender - Shipment Contract
Seller must: * deliver goods to a carrier & * make contract for their shipment * Get and deliver any doc. nec. for the buyer to take poss. of the goods AND * give buyer notice of shipment Often ID as "F.O.B seller's place of business" _When K is silent_ - Shipment K is presumed when the K requires shipment by a 3d party carrier
31
Method of Tender - Destination Contract
Seller must: * Deliver goods to the place specified in the K AND * Tender them there by holding them at the buyer's dispositon AND * Give the buyer notice "F.O.B. buyer's place of business"
32
What is a C.I.F Contract ?
Price includes the cost of the goods, cost of transporting, and cost of insuring the goods during shipment
33
What is a C&F Constract ?
The price includes the cost of the goods and the cost of the shipment
34
What is a F.A.S. Contract?
Free Alongside Ship * Seller oblig. to deliver the goods alongside a designated vessel in a manner that comports with the ord. course of bus. of the port of delivery or at specified dock
35
What are the buyer's obligations when a conforming tender is made?
Accept & Pay the price under the K * Rejection would be a breach of K
36
When is payment due when gooda are shipped by carrier? Non-carrier?
_Carrier_ - At the moment the buyer receives the goods _Noncarrier_ - Upon tender of delivery by the seller
37
What is a shipment under reservation?
A seller who ships by carrier under K that doesn't specify the method or form of payment can send the goods under reservation * Carrier will hold the goods until buyer pays * Accomplished by seller's getting a negotiable or nonnegotiable bill of lading
38
Buyer's Obligation - Tender of Payment Default
Unless otherwise agreed * Tender of payment is a condition to the seller's duty to tender & complete delivery
39
Buyer's Obligation - Sufficiency of Tender of payment
Sufficient when made by any means or in any manner consistent with the ord. course of bus. * Unless seller: 1. Demands payment in legal tender (cash) and 2. Gives any extension of time reas. nec. to get the legal tender
40
Tender of Payment - Payment by check
If payment made by check * Payment is conditional until the check is paid or dishonored
41
Buyer's Right to Inspect
Condition to payment * Buyer has right to inspect the goods that are tendered, delivered, or identified to the K for sale * Unless, K provides otherwise * Can happen at any reas. time & place and in any reas. manner
42
Divisible or Installment Contracts - Common Law
Contract where various units of performance are divisible into distinct parts * Recovery - limited to amount promised for the segment of the K performed * Damages - recoverable for breach of the other segments
43
Divisible or Installment Contracts - UCC
Goods delivered in multiple shipments, each to be separately accepted * Perfect tender rule doesn't apply * The right to reject is determined by a substantial conformity standard * Buyer _can only reject_ if nonconformity subst. impairs value of _that Shipment_ to the buyer & can't be cured * Buyer _can cancel_ only if nonconforming tender subst. impairs the value of the _entire K_
44
What is the effect if a condition is suspended
The condition is restored upon expiration of the suspension
45
What is the effect if the condition is excused?
The party having the benefit of the condition can never raise it as a defense
46
Waiver of condition
Party whose duty is subj. to a condition can waive a nonmaterial condition by words or conduct, cond. can be reinstated if: 1. The waiving party communicates the retraction b/f the cond. is due to occur, AND 2. The other party has not already suffered detrimental reliance
47
Wrongful Interference of a condition
Duty of good faith and fair dealings is implied in ALL contracts - included in this duty is a duty not to hinder the other party's perf. & a duty to cooperate If party whose duty is subj. to a cond. wrongfully prevents or interferes with the occurence of that cond. * Cond. is excused * interfering party has absolute duty to perf.
48
Election to Waive
A party who chooses to cont. with a K after a condition is broken effectively elects to waive that condition
49
Estoppel - When is a party estopped from using condition as a defense ?
A party who indicates that a cond. won't be enforced may be estopped from using that cond. as a defense if: * other party reas. relied on the impression that the cond. had been waived
50
How can a seller of goods overcome a breach of the perfect tender rule?
1. Cure the breach 2. Show reasonable grounds to believe delivery was acceptable AND 3. Show reas. grounds that the B would accept the nonconformity * Approp. due to TU, COD, COP OR * Exp. assurances to that effect from buyer
51
What is the UCC default rule for a missing price term?
Price = reasonable market price at the time est. for delivery
52
What is the common law default rule for a missing price term?
Reasonable value for the services rendered
53
Under the UCC what must the party entitled to determine the particular quantity of goods do?
Make their determination in good faith * Can't lie about output and can't lie about actual requirements
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