Discharge

Question 1

Discharge of Duty

Answer 1

If cond. are excused or satisfied the parties have an absolute duty to perform

• Unless that duty is discharged
• If some supervening event or change in circ. arises after the formation of the K, the duty to perf. might be discharged

Question 2

When will the doctine of Impracticability excuse performance?

Answer 2

The defense of impracticability is avail. if:

1. Perf. becomes illegal after the K is made,
2. Specific subj matter of the K is destroyed,
3. Perf. party to the K dies or becomes incapacitated (pers. services K), OR
4. Performance become otherwise impracticable

Question 3

What are the elements of Impracticability?

Answer 3

For the defense to be available, the following cond. must be met:

1. An unforeseen event occured
2. The nonoccurrence of the event was a basic assumption on which the contract was made AND
3. The party seeking discharge is not at fault

Question 4

Impracticability & K to perform services

Answer 4

If the K can be delegated, it’s not discharged by the death or incapacity of the party who was to perf. the services

Question 5

In what situations has impracticability typically been found?

Answer 5

1. Unforeseen natural disasters
2. wars
3. trade & military embargos
4. Strikes
5. Local crop failures (unforeseen shutdown of major sources of supply)

Question 6

Impracticability & Assumption of the Risk

Answer 6

If a party assumes the risk of an event happening that makes perf. impracticable

• defense of impracticability won’t apply

Question 7

Partial Impracticability

Answer 7

When impracticability doesn’t prevent seller from delivering some of the goods

• They must be apportioned amoung all the buyers w/ whom the seller has contracted
• Buyer can refuse to accept and can cancel the K

Question 8

Impracticability & Failure of a particular source of Supply

Answer 8

If K specifically identifies a source and the source of supply fails

• Performance is discharged even if other sources are available

Question 9

Impracticability & Failure of Agreed on Method of Transportation

Answer 9

If the agreed on delivery facility or method of transportation or payment becomes impracticable or unavailable

• by no fault of either party
• Any commercially reas. delivery method may be tendered & must be accepted

Question 10

When will the doctrine of frustration of purpose excuse performance?

Answer 10

When unexpected events arise that destroy one party’s purp. in entering into the K, even if perf. is not rendered impossible

• The unexpected event doesn’t need to be foreseeable
• but must be so severe it’s not w/in assumed risks inherent under the K
• And can’t be the frustrated party’s fault

Question 11

When will rescission excuse performance?

Answer 11

Non-defaullting party can rescind

• grounds for rescission must have been present when K formed (Mutual mistake, fraud, misrep., Unilateral mistake - if the other party knew or should have known of the mistake)

Question 12

Rescission & Third Party Beneficiaries

Answer 12

Contract is not discharged by mutual rescission if the rights of the 3d party beneficiary have already vested

Question 13

When will release excuse performance? - Common Law

Answer 13

A writing that manifests intent to discharge another party from an existing duty

• Release must be supported by consideration to discharge the duty
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Question 14

What is the effect of destruction of identified goods b/f ROL passes to buyer?

Answer 14

If by no fault of either party

• K is avoided
• Both parties are discharged
• Neither party is in breach

Question 15

When will damaged goods excuse performance?

Answer 15

If goods Damaged but not destroyed

• The contract is avoided
• Unless buyer chooses to take the goods at a reduced price w/out any other claim against the seller

Question 16

What is the effect of the Doctrine of Frustration of Purpose?

Answer 16

Frustrated party can rescind the K w/out paying damages

Question 17

What is the effection of the recission of a K?

Answer 17

The canceling of a K, to restore the parties to the positions they had b/f the K was made

Question 18

Rescission by Mutual agreement

Answer 18

Parties can mutually agree to rescission

• The surrender of rights under the orig. K by each P is consideration for the rescission by mut. agmt.

Question 19

When will release excuse performance ? - UCC

Answer 19

Claim or right can be discharged in whole or in part w/out consideration

• by written waiver or renunciartion signed & delivered by the aggrieved party
• No consideration needed

Question 20

What is the effect of destruction of identified goods after ROL passes to the Buyer?

Answer 20

K is not avoided & seller can demand perf. by the buyer