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33 Cards in this Set
- Front
- Back
What are four kinds of discharge? |
1. Performance by the parties 2. Material breach by one or both of the parties, 3. Agreement of the parties 4. Operation of law |
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Definition of a condition |
An event whose occurrence or nonoccurence affects a duty or performance |
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Express condition (3 types) |
Contingency explicitly put forth in writing 1. Satisfaction 2. Subjective satisfaction 3. Objective satisfaction |
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Satisfaction |
Express condition making performance contingent upon one party's approval of the other's performance. |
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Subjective satisfaction |
Approval based upon a party's "honestly held" opinion |
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Objective satisfaction |
Approval based upon whether a reasonable person would be satisfied. |
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Implied in fact condition |
Contingency understood by the parties to be part of the agreement, though not expressed (implied duty that the homeowner needs to tell the painters what color to paint the house) Also called constructive condition |
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Implied in law condition |
Contingency not contained in the language of the contract imposed by law (delivery and tender must be made at the same time). |
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Concurrent conditions |
Conditions that are to take place at the same time |
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Conditions precedent |
An event that must or must not occur before the performance is due. |
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Conditions subsequent |
An event that terminates a duty of performance (pay me $5 until it rains) |
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Discharge |
Termination of a contractual duty |
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Performance |
Fulfillment of a contractual obligation resulting from a discharge |
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Definition of a breach |
A wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party. |
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Material breach |
Nonperformance that significantly impairs the injured party's rights under the contract, and discharges the injured party from any further duty under the contract. |
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Prevention of performance |
One party's substantial interference with or prevention of performance by the other; constitutes a material breach and discharges the other party to the contract. |
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Perfect tender rule |
Standard under the UCC that a seller's performance under a sales contract must strictly comply with contractual duties and that any deviation discharges the injured party. |
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Substantial performance |
Performance that is incomplete but that does not defeat the purpose of the contract does not discharge the injured party but entitles him to damages (unlike UCC) |
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Anticipatory repudiation |
An inability or refusal to perform, before performance is due, that is treat as a breach, allowing the non repudiating party to bring suit immediately ("time is of the essence" and the manage cannot bring the suits in time) Repudiation can be retracted, but only before the other party retracts) |
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Material alteration of written contract |
A material and fraudulent alteration of a written contract by a party discharges the entire contract. |
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Mutual rescission |
An agreement between the parties to terminate their respective duties under the contract. Only works if both parties still have performance. |
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Substituted contract |
A new contract accepted by both parties in satisfaction of the parties' duties under the original contract. |
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Accord and satisfaction |
Substituted duty under a contract (accord) and the discharge of the prior contractual obligation by performance of the new duty (satisfaction) |
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Novation |
A substituted contract involving a new third-party promisor or promisee. |
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Discharge by operation (6 things) |
1. Subjective impossibility 2. Objective impossibility 3. Destruction of subject matter 4. Subsequent illegality 5. Frustration of purpose 6. Commercial impracticality |
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Subjective impossibility |
The promisor but not all promisors cannot perform the duty |
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Objective impossibility |
No one can perform the duty |
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Destruction of subject matter |
Will discharge contract if it occurs without the promisor's fault |
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Subsequent illegality |
If performance becomes becomes illegal or impractical as a result of a change in the law, the duty of performance is discharged |
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Frustration of purpose |
Principal purpose of a contract cannot be fulfilled because of a subsequent event (Rich people London parade) |
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Commercial impracticality |
Where performance can be accomplished only under unforeseen and unjust hardship, the contract is discharged under the code and the Restatement |
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Bankruptcy |
Discharge available to a debtor who obtains an order of discharge by the bankruptcy court |
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Statute of limitations |
After the statute of limitations has run, the debt is not discharged, but the creditor cannot maintain an action against the debtor |