Contracts Ii

Front 1

How can you tell if it is a condition or a promise?

Back 1

1) Did the author use words of condition?
2) Does the Document demonstrate words of condition?
3) Hold against the Party who drafted the document.
4) Absent Plain Language we favor a promise.
5) Look to the parties intent if the factor did not occur. If there would be damages it would point to a promise. Or if the duty would not be activated or discharged.
6) Look at the contract as a whole.
7) Who should bear the burden of the Cost? But the burden of the cost on those who are in control of the risk. Unless the language is clearly intended to shift that risk.

Front 2

What are the ways you can order performance?

Back 2

A constructive condition is a way courts order performance. Another way is Tender.

Front 3

What is tender?

Back 3

TENDER- an unconditional offer to perform, coupled with a manifested or demonstrated ability to carry about the offer of performance, and to produce the subject matter of the tender.
Reasoning? It is a substitute for acceptance. But, each part of the definition of tender needs to be met

Front 4

Tender:

UCC- 2-507,

Effect of Seller's Tender; Delivery on Condition

Back 4

Tender of delivery is a condition unless otherwise agreed, to his duty to pay for them. Tender entitles the seller to acceptance of the goods and to payment according to the contract.

Front 5

Tender:
2-511

Tender of Payment by Buyer; Payment by Check

Back 5

Unless otherwise agredd tender of payment is a condition to the seller's duty to tender and complete any delivery.

Front 6

Tender:

What happens if neither party has tendered performance at the appropriate time?

Problem 142 - pg 688

Back 6

Neither party has tendered performance. The time for potential tender has been enlarged. If either party tenders performance then the contract must be performed. If they do not want to go through with the deal they can abandon. He can call and say I want out, that is ok. One party can terminate the expanded amount of time.

Front 7

Tender:

What is fhe seller fails to devlier on the date agreed and the buyer sues 10 days after. Does the buyer have to tender payment to go forward with the suit?

Problem 143- pg 688

Back 7

he must tender in order to sue, unless the seller and buyer had agreed otherwise. They have otherwise agreed, they ordered performance. Boat first, then payment. Obligation does not occur if parties do not tender.

Front 8

Tender:

What if the seller delivers less than the agreed amount and demands payment before he delivers the rest?

Problem 144

Back 8

It does not say unless otherwise agreed. You would have to deliver all 12,000 in order to get paid.

Front 9

What if there was an agreement and the performance was partially completed and the actor requests payment before he finished performance?

Problem 145

Back 9

Does he has the right to perform. Nothing in the language says it can be broken up, as to one of the exceptions. You must fully perform to get paid. He has to perform all the way!

Front 10

Tender:
What does the UCC use?

Substantial performance or the perfect tender rule

Back 10

The UCC does not use doctrine of substantial performance instead it uses the Perfect tender Rule.
2-601 is the Perfect Tender Rule: You must perform literally under the code. If not there are three choices

Front 11

Perfect Tender rule:

2-601

Back 11

Subject to installment contracts and unless otherwise agreed if the goods or the tender of delivery fail in any respect to confrom to the contract, the buyer may
a) reject the whole; or
b) accept the whole; or
c) accept any commercial unit or units and reject the rest

Front 12

Examples of the Pefect Tender Rule:

Printing Center and Capital Dodge

Back 12

Printing Center of Texas
• Introduces the perfect tender rule, (but code does not apply)
• Clear statement of why the doctrine of substantial performance does not apply to the code.
Capital Dodge
• Example of someone who accepts the goods
Printing Center of Texas v. Supermind Publishing Co.
• Does the code apply? No because this is a service contract.
• The K is for 5,000 books. The pages are the wrong color grey when supposed to be white.
• Bottom of 708 and 709, only in good faith. If you don’t want the books you cant find something wrong with them just to get out of the K. This is the minority view. (because motive is not an issue in contracts)
Capital Dodge v. Northern Concrete Pipe
• Acceptance occurs when: 2-606
 After a reasonable opportunity to inspect
 Fails to make an effective rejection after a reasonable time to inspect them
 Uses them
• Physical possession does not mean acceptance.
• If you accept the good you have a right to expect it and you can reject it within a reasonable time and you have to notify the seller.
• Taking delivery is not acceptance, after delivery you have a reasonable time to inspect. A buyer has a reasonable time to reject for non-conformity. The buyer must notify the seller.
• All of these things were done.

Front 13

Exceptions to the Perfect Tender Rule:

Back 13

There are some exceptions. If you say “give or take” ,
1.) unless other wise agreed that literal performance is not agreed.
2.) Installment contracts
3.) 2-508 Cure by replacement

Front 14

Exceptions to the Perfect Tender Rule:

2-508- Cure by replacement

Back 14

Where any tender of delivery by the seller is rejected because non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the cohntract times ake a confroming delivery.
2) Where the buyer rejects a non-conforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a furhter reasonable time to substitute a conforming tender.

Front 15

Example of 2-508- Cure by replacement:

Colonial dodge

Back 15

Colonial Dodge
• Did he accept the goods. Yes, because his lawyer said so.
• The D’s lawyer screwed up and assumed that he accepted the goods.
• Now we look to see if he can revoke
• A buyer can revoke if the product if the nonconformity substantially impairs the value of the goods. (608)
• There was a tire shortage.
• (A) it had not been seasonably cured
• (B) there was a difficulty of discovery because the spare tire was hidden.
• Once he revokes the acceptance he can reject the car and get his money back.
• The right of rejection is subject to the right to cure. 508- describes different rights to cure.
o Can not cure with in the time
o A seasonable time to cure, even if the time has run. If the time of performance has not yet passed and they say they are going to cure, then you take and wait to cure. You have to give that that right.
 Pg. 718 Highlighted section

Front 16

Can you refuse to accept the goods if they do not conform exactly to the contract?

Back 16

Problem 150: There is an installment contract. It is non conforming. It does not really substantially impair it. You can demands assurances that it will be repaired in the future. It can not revoke the whole K. Building a railroad and install 500 per week. End of week no more week. If run out of rails then you can cover.

2-609; 6-212

Front 17

2-609:

Right to Adequate Assurance of Performance

Back 17

When reasonable grounds for insecurity arise with respect to the performanc eof either party the other may in writing demand adequate assurmance of due performanc eand until he receives such assurances may if commercially reasonable suspend any performance for which he has not already received the agreed return.

After Receipt of a justified demand failure to provide within a resonable time not exceeding thirty days and such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the K. (Demand assurances in writing, 30 days to respond, if not repudiates the K)

Front 18

Breach of Installment Contract:
2-612

Back 18

like progress payments parties agree to chop it up, you can reject just that installment not like the entire k like the perfect tender rule. If it is soo bad you can reject the whole K.