Contracts Ii Week 5

Front 1

Andy employs Bonnie to build him a house, promising to pay her the final $10,000 payment if his architect, Chris, approves of the work and issues a certificate of satisfaction. Bonnie completes the work, but there are minor defects. Based on these defects, Chris refuses to issue the certificate of satisfaction. Andy then tells Bonnie that he will pay her the remaining $10,000, despite the fact that Chris did not issue the certificate. Andy writes the check to Bonnie. If Andy later places a stop payment on the check and Bonnie sues him for the remaining payment, may Andy successfully claim that he had no duty to pay until Chris issued a certificate of satisfaction?

Back 1

No. Once Andy agreed to pay despite the non-occurrence of the condition, he waived his right to assert it later, and he may have made an election to perform anyway. It's not likely that he can now claim it must be complied with if he performed despite his knowledge of the non-occurrence.

Front 2

Bonnie employs Andy to build a house for $300,000, payable on condition that Bonnie's architect, Chris, issues a certificate of satisfaction. Andy properly completes the work, but Chris refuses to give the certificate because of collusion with Bonnie. May Bonnie successfully avoid payment to Andy by claiming that the condition of Chris's approval has not been met?

Back 2

No. The condition would be excused because Bonnie prevented the approval and did not cooperate in good faith for it to occur. She would still owe Andy the $$, despite the failure of the condition to occur, it would be excused.

Front 3

Andy leases property to Bonnie for a stated monthly rent. The lease provides that Andy will remove all personal property that is currently there and that the removal of the property is a condition to Bonnie's duty to pay the rent. After Andy had removed most of the personal property from the location, Bonnie told him that she would pay the rent, even though not all of the personal property had been removed. May Bonnie claim that she is under no duty to pay the rent the following month because Andy has not yet removed the rest of the personal property remaining on the premises? Is Andy under a duty to remove the remaining personal property?

Back 3

No. Bonnie may not reassert that the failure of the condition keeps her duty from arising, at least without reasonable notice, but Andy is under a contractual duty to remove the remaining personal property.

Front 4

Andy and Bonnie enter into a prenuptial agreement that states that Andy's estate is to pay Bonnie $100,000, if Bonnie survives Andy. Four years later, Andy shoots Bonnie and himself. Bonnie dies instantly; Andy dies the next day. May Bonnie's estate successfully argue that Andy's estate owes it the $100,000?

Back 4

Yes. Although the condition did not occur, Andy prevented the condition from occurring, thus excusing it.

Front 5

Andy contracts to sell and Bonnie contracts to buy a machine for $10,000, delivery to be on March 2, and payment to be within 30 days thereafter. Andy does not deliver the machine until March 15, under circumstances that make the delay a material breach. Bonnie accepts the machine, but she refused to make the payment. Must Bonnie pay the contract price despite the material breach?

Back 5

Yes. You can waive a constructive condition. And here, Bonnie's behavior indicated that she waived the condition of timely delivery, so she must pay, but she would have a claim against Andy for any damages incurred as a result of the delay.

Front 6

On January 2, 2003, Andy and Bonnie entered into a contract for the sale of land owned by Bonnie. According to the contract, Andy was to pay Bonnie $100,000 on May 1, 2004, and Bonnie was to have a title search finished by that date, and she was to convey the land, with clear title, to Andy on September 1, 2004. On March 15, 2003, Andy makes the following statement to Bonnie: "I will not buy your land, and I will not pay you $100,000 on May 1, 2004." Has Andy repudiated? What may Bonnie now do? Must she conduct the title search?

Back 6

Yes. See Restatement Second section 250. Andy has repudiated. He has made a clear statement to Bonnie that he will commit a material breach of the K. Bonnie may sue for total breach of K. She is also discharged of her duty to conduct the title search. (The law will not require a useless thing.)

Front 7

On January 2, 2003, Andy and Bonnie entered into a contract for the sale of land owned by Bonnie. According to the contract, Andy was to pay Bonnie $100,000 on May 1, 2004, and Bonnie was to have a title search finished by that date, and she was to convey the land, with clear title, to Andy on September 1, 2004. On March 15, 2003, Bonnie sells this land to Chris. Has Bonnie repudiated? What may Andy now do?

Back 7

Yes, see restatement second section 250. Bonnie has repudiated because she has take a voluntary, affirmative action that renders her unable or apparently unable to perform the K with Andy. Andy may immediately sue Bonnie for total breach of K.

Front 8

On January 2, 2003, Andy and Bonnie entered into a contract for the sale of land owned by Bonnie. According to the contract, Andy was to pay Bonnie $100,000 on May 1, 2004, and Bonnie was to have a title search finished by that date, and she was to convey the land, with clear title, to Andy on September 1, 2004. On January 15, 2004, Bonnie learns that Andy is insolvent. What may Bonnie do immediately?

Back 8

See Restatement Second section 252. She may suspend her duty to conduct the title search, if reasonable, and she may demand assurances from Andy that he will perform under the K. She is not immediately discharged from her duties under the K

Front 9

On January 2, 2003, Andy and Bonnie entered into a contract for the sale of land owned by Bonnie. According to the contract, Andy was to pay Bonnie $100,000 on May 1, 2004, and Bonnie was to have a title search finished by that date, and she was to convey the land, with clear title, to Andy on September 1, 2004. On February 15, 2004, Bonnie learns that Andy is insolvent. And on February 16, 2004 she demanded assurances from Andy. By April 1, 2004, she still has not received an assurance from Andy. Assuming that he has failed to provide assurances within a reasonable time, what may Bonnie do now if she still has no performed the title search? What may Bonnie do now if she has performed the title search?

Back 9

If Bonnie has not performed the title search, her duties under the contract are discharged and she may immediately sue for total breach of K. If Bonnie has performed the title search, she has no further duties under the K until September 1, 2004, so she must now wait until May 1, 2004, to sue Andy for his breach of K.

Front 10

On January 2, 2003, Andy and Bonnie entered into a contract for the sale of land owned by Bonnie. According to the contract, Andy was to pay Bonnie $100,000 on May 1, 2004, and Bonnie was to have a title search finished by that date, and she was to convey the land, with clear title, to Andy on September 1, 2004. On March 15, 2003, Bonnie sells this land to Chris. Andy learns of the sale to Chris on March 16, 2003, and he writes Bonnie demanding that she perform her contractual duties to him. Bonnie does not respond to Andy's demand of March 16, 2003, and on September 30, 2003, Andy enters into a contract for a substitute piece of property with David. On December 15, 2003, Bonnie writes Andy advising that she has reacquired the property from Chris, and she is ready, willing, and able to perform all her contractual duties owed to Andy. What may Andy do now?

Back 10

Andy's demand to Bonnie does not impair any of his rights. See restatement second section 257. Bonnie's attempted retraction of her repudiation is ineffective because Andy has materially changed his position in reliance on her repudiation. Bonnie did not provide any adequate assurances that she would perform her contractual duties, so Andy's duties under the K with Bonnie are discharged and he may immediately sue Bonnie for total breach of K.