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62 Cards in this Set
- Front
- Back
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Excuse of Nonperformance/Improper Performance -- Material Breach
(Services only, never goods) |
For excuse from non/improper performance
Repeated Ks, if performance less than 50% = Material Breach OPPOSED to: Substantial Performance |
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Remedies for Unexcused Nonperformance -- Non-Monetary
(4) |
1) Specific Performance
2) Injunction 3) Reclamation 4) Equitable Remedies |
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Excuse of Nonperformance/Improper Performance -- Article 2 alternative for Material Breaches
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DO perfect tender and installment contract principles
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Remedies for Unexcused Nonperformance -- Specific Performance
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Usually last resort on Bar (so wrong answer)
Usually not goods, UNLESS - unique good NEVER service Ks - can get injunction though |
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Excuse of Nonperformance/Improper Performance -- Divisible Ks
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Contract law allows recovery for substantial performance of a divisible part even when material breach for entire K
payment = per task |
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Remedies for Unexcused Nonperformance -- Reclamation
(3) |
1) Buyer insolvement at time of receipt
2) Seller demands goods w/in 10 days of receipt*** OR r/s time if express representation of solvency before delivery 3) Buyer still has goods at time of demand |
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Excuse of Nonperformance/Improper Performance -- Express Condition
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Limits obligations created by other K language
require STRICT COMPLIANCE Can be EXTINGHUISHED with: 1) waiver (by benefitted party) 2) prevention (by benefitted party) "only if, provided that, so long as, subject to, in the event that, unless, when, until, on condition that" |
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Remedies for Unexcused Nonperformance -- Money Damages
(GOAL in K) |
GOAL in K: compensate plaintiff, not punish defendant
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Excuse of Nonperformance/Improper Performance -- Condition Precedent/Subsequent
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PRECEDENT -- condition must occur before any obligation to perform
SUBSEQUENT -- occurrence after performance excuses any further performance |
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Remedies for Unexcused Nonperformance -- Expectation Damages
(3) |
Expectation protects contracting parties' belief the other other will not breach.
1) Dollar value of performance w/o breach 2) Dollar value of performance w/ breach 3) Compare two |
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Excuse of Nonperformance/Improper Performance -- Anticipatory Repudiation
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Unambiguous statement or conduct indicating:
1) repudiating party will not perform 2) made prior to time performance was due CAN LEAD TO: 1) excuse 2) claim for damages UNLESS claimant has already finished performance (then must wait for date of K breach to occur before claim for damages can be made) RETRACTION possible when repudiating party takes back their position BEFORE any material changes in positions |
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Remedies for Unexcused Nonperformance
Expectation Article 2 |
Seller BREACHES, Buyer KEEPS good --> FMV if perfect - FMV as delivered
Seller BREACHES, Seller KEEPS good --> market price at time of discovery of breach - K price OR replacement price - K price Buyer BREACHES, Buyer KEEPS good --> K price Buyer BREACHES, Seller KEEPS good --> Resale price + (maybe) provable lost profits + INCIDENTAL -AVOIDABLE ALTERNATIVES: Reliance, LD |
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Excuse of Nonperformance/Improper Performance -- Insecurity qw(Article 2 only) qw(3)
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If words/conduct give "reasonable grounds for insecurity", then other party can:
1) Demand adequate assurance 2) If commercially r/s 3) Can suspend performance until adequate assurance |
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Remedies for Unexcused Nonperformance -- Lost Profits for Volume
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Can recover when loss of two potential sales
Key concept -- "inventory" Measure of Damages - Provable lost profit |
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Excuse of Nonperformance/Improper Performance -- Excuse by Later Contract
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RECISSION -- depends if performance still remaining from both parties
ACCORD: later agreement in which one party to contract agrees to accept performance different from that originally promised SATISFACTION: performance on the accord; discharges both accord and original debt (IF and THEN) |
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Remedies for Unexcused Nonperformance -- Incidental Damages
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Usually cost of finding replacement
ALWAYS recoverable regardless of foreseeability |
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Excuse of Nonperformance/Improper Performance -- Modification
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Agreement by parties to an existing obligation to accept a different agreement in satisfaction of existing condition
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Remedies for Unexcused Nonperformance -- Consequential Damages
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on bar not GENERAL damages ANYONE could sustain
more SPECIFIC TO PLAINTIFF that Def has r/s knowledge to know of |
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Excuse of Nonperformance/Improper Performance -- Novation (4)
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Later agreement that changes party that is going to perform K terms; excuse of performance (by substituting party)
1) previous valid contract 2) an agreement among all parties, including new party 3) immediate extinguishments of contractual duties as between original contracting parties 4) valid new contract |
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Remedies for Unexcused Nonperformance -- Avoidable
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No recovery for damages that could have been avoided w/o undue burden on Plaintiff
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Excuse of Nonperformance/Improper Performance -- Delegation
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When a non-K party substituted as being responsible for performance
Does not require agreement of parties and does not excuse |
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Remedies for Unexcused Nonperformance -- Certainty
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Keep an eye out for:
1) New Business 2) New Activity |
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Excuse of Nonperformance/Improper Performance -- Impossibility/Impracticability
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Impossibility -- cannot be done by anyone (objective)
Impracticability -- cannot be done without undue hardship or expense because of unforeseen circumstances that the parties could not anticipate at the time of K formation Service Ks - neither party bears risk of loss UCC -- generally seller assumes risk |
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Remedies for Unexcused Nonperformance -- Reliance
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Alternative to expectation
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Excuse of Nonperformance/Improper Performance -- Impossibility/Impracticability --
DEATH |
Death does not make K obligation disappear
EXCEPTION -- Personal Service K (both parties must have intended specific person perform K) |
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Remedies for Unexcused Nonperformance -- Liquidated Damges
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Contract provision that sets damages in instances of breach. Qw
1) Damages difficult to forecast at time of K 2) r/s forecast? on bar exam -- set numbers are usually not LDC but a PENALTY |
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Excuse of Nonperformance/Improper Performance -- Impossibility/Impracticability --
Later Law or Regulation |
K made illegal? Impossible.
K purpose made legal? Frustration of Purpose. |
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Remedies for Unexcused Nonperformance -- Reliance
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Damages based on Defendant's actual costs based on reliance
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Express Warranty
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Has to do with the quality or description of goods and is no different in kind from other express terms of a K such as price, delivery or quantity
Determined based on the intention of the parties, views in the light of the surrounding circumstances Once made, an express warranty cannot be disclaimed |
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Ways express warranties are created by seller (3)
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1) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods
2)Any description of the goods which is made part of the basis of the bargain 3) Any sample or made which is made part of the basis of the bargain |
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Implied Warranty of Merchantability
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If not modified or waived, the goods must at a minimum be fit for the ordinary purpose for which goods are used.
seller must be a merchant in goods of the kind or holds himself out as having expertise in the goods of the kind. |
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Implied Warranty of Fitness for a particular purpose
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Goods must fit the buyer's needs
Sellar knows or has reason to know: 1) the buyer's particular purpose 2)That the buyer is relying on the seller's advice and still/expertise in furnish a good suitable for sale |
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2 Types of Implied Warranties
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1) Fitness for a particular purpose
2) merchantibillity |
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Warranty disclaimers
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An attempt to eliminate a warranty altogether or in some way narrow the circumstances under which the warranty will operate
Express warranty cannot be disclaimed Implied warranty limitations 1)"as-Is" --> must be conspicuous 2)Defect that buyer should have noticed upon inspection |
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Duress
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Duress: when can a party disaffim a contract
Element of Duress An improper threat by the promisee or a third party that left the promisor with no reasonable alternative but to assent |
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Undue influence
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Elements:
Relationship The domination of one party over another OR A confidential relationship Unfair persuasion or excessive press applied to induce a manifest ion of assent by one vulnerable to such pressure |
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Misrepresentation
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An assertion/statement that is not in accord with the facts that is either fraudulent or material that induced the recipient to make the K and the recipient's reliance must have been justified
Fraudulent: a misrepresentation is fraudulent if it is consciously false and intended to mislead another Material: likely to induce a reasonable person to manifest his assent, lily to have an impact on the decision making |
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Unconscionability
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in light of the situation, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract
2 types: Procedural--manner in which K was negotiated and circumstances of the parties Substantive: actual terms of the agreement |
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Invalidation: Public Policy
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Courts look at what is best for society as a whole, will not allow a party to use the mechanism to do anything that will be injurious to the public
Deterrence |
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Mutual Mistake
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A mistake
As to basic assumptions That has a material effect on the exchange where the party seeking relief has not assumed the risk |
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Unilateral mistake
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A mistake by one of the parties will not excuse his or her performance of the K Unless:
The party seeking relief establishes all the elements of mutual mistake AND else establish either: 1)That the other party knew or should have known about the mistake OR 2)That enforcing the K despite the mistake would be unconscionable AND that the party seeking to be excused does not bear the risk of mistake |
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Impossiblity
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The thing promised simply could not be performed at all
Subject matter has been destroyed |
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Frustration of purpose
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Could be performed but "why bother anymore?
Elements: substantial reduction of value Because of the occurrence of the event, the nonoccurrence of which was the basic assumption of K Without party's fault The party seeking relief does NOT bear the risk of that occurrence of the event either under the language of the K or the surrounding circumstances |
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Impracticability
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It becomes substantially more burdensome to perform; something happened, cost of performance too great
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Force Majeure clause
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An event or effect that cannot be anticipated or controlled, includes acts of nature and acts of people such s riots, strikes and wars
typically provide excuse where performance is prevented or delayed by circumstances beyond the control of the party seeking excuse |
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Modification
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Modifier must have a legitimate commercial reason for seeking a modification
Threats intended to coerce modification are in bad faith |
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Novation
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Form of substituted contract. It is one where either the creditor or the debtor is replaced by a third party
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Accord
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an agreement to settle a prior unliquidated or disputed obligation
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Satisfaction
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Performance of accord
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Substituted K
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intent to discharge original obligations
Only one remedy--accord |
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Material Breach
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Critical Factors:
The extent to which the injured party will be deprived of the benefit which is reasonably expected The extent to which the party failing to perform or to offer to perform will suffer forfeiture The likelihood that the party failing to perform or to offer to perform will cure his failure Davis likes to focus on whether the breach goes to the essence of the non-breaching parties expectations |
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Anticipatory Repudiation
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If either party to a contract in advance of the time set for performance repudiates the K, the repudiation may excuse the other party from perfomring
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Acts sufficient for Anticipatory Repudiation
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something
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Retraction of repudiation
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something
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Total breach
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something
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difference between material and total breach
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something
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partial breach
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something
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Nominal damages
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something
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Expectation interest
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something
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Reliance interest
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something
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Expectation Damages
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something
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Incidental Damages
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something
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