Conditions Definition
Conditions are agreed-upon limitations on perfromance. Conditions make an obligation to perfrom contingent on the occurance of some specific event or condition.
Conditions Precedent
- performance is not obligated unless condition occurs; non-occurance excuses performance
Conditions Subsequent
- Condition that occurs after perfromance has begun and excuses performance.
Conditions vs. Promise
Failure of a promise leads to a breach, whereas failure of condition relieves a party’s performance obligation; to distinguish, look to parties intent.
Excuse of Condition
If condition exists, it must be strictly complied with; but substantial perfromance of the condition may suffice if it fulfills condition’s purpose.
- A person who is protected or benefitted by a condition may make statements that consitute a waiver of the condition or estop the condition from being enforced.
Insecurity Definition
Excuse by insecurity arises if A gives B reasonable ground for insecurity or uncertainty (by words or conduct) regarding whether A will perform under the contract.
- Grounds for insecurity or uncertainty must be reasonable.
Insecure Party’s Options
- Demand adequate assurances
- Suspend performance until he receives adequate assurances
- Party may treat contract as repudiated if adequate assurances are not provided.
Party may treat contract as repudiated if adequate assurances are not provided.
Anticipatory Repudiation Defiinition
When one party to a contract makes it clear that he will not perfrom under the contract; excuses performance by the other party.
Anticipatory Repudiation Elements
Arises if one party to a contract:
- Makes an unambiguous statement or conduct
- Prior to the time perfromance is due
- Which indicates he will not perfrom
Effect of Anticipatory Repudiation
If repudiation occurs, the non-repudiating party’s duty to perfrom is excused; he may treat the contract as breached and sue.
Impossibility & Impracticability Definition
Performance on a contract may be excused as impossible or impracticable if an unforseen event occurs after contract formation but before perfromance is complete.
Requirements to Excuse Perfromance
An unforseen event, the nonoccurrence of which was a basic assumption of the parties, must make completing perfromance either:
- Impossible – perfromance is objectively impossible, or
- Impracticable – performance is only possible with extreme and unreasonable difficulty or expense.
