Chapter 18-performance/discharge

Discharge

-caused by performance

-terminate contractual duties OR to be finished with duties OR no longer be required to perform

performance

-fulfillment of one’s duties arising under a contract

-the normal way of discharging one’s contractual obligations.

conditions

-definition

-absolute promises v conditions

-types of conditions

conditions definition

-qualification in a contract based on a possible future event and it can trigger performance OR cause performance to end

-occurence or nonoccurence of event

-if condition not met-parties discharged

absolute promises

-promises of performance

-must be performed or parties promising acts will be in breach of contract

types of conditions

-conditions precedent

-conditions subsequent

-concurrent conditions

-express and implied conditions

conditions precedent

-must be fulfilled before partys performance can be required

-triggers performance

-if does not occur-parties discharged from contractual obligation

ex: real estate contract requiring loan

ex :insurance not seeing wrecked car

conditions subsequent

-performance to end

-operates to terminate a partys absolute promise to perform

-occurrence of conditioning event extinguishes existing contractual duty so parties are discharged

-doesnt have to be expressed

concurrent conditions

-performance of each party is conditioned or dependent upon the simultaneous performance of the other party

-buyer pays for goods when delivered

express and implied conditions

express-condition clearly stated and provided for in contract by parties

implied-in-fact condition: one not expressed by parties but is understood or inferred from contract

discharge by performance

-perfect performance

-full complete performance in manner prescribed by contract discharges performing party

-substantial performance

-material breach of contract

-anticipatory repudiation of contract

substantial performance definition

-performance which does not greatly vary from the performance that is promised in the contract but is slightly less than that which reasonably could be expected

-criteria

-other partys duty

-measure of damages

substantial performance criteria

-party must have performed in good faith-tried to do whats called for

-omission must be minor and easily remedied by monetary damages

-performance must create substantially same benefits as those promised-equivalent in industry

-construction contracts NOT personal satisfaction

ex: different toilets in house-have to keep house

substantial performance other partys duty

-if performance substantial other party duty to perform remains absolute

-less damages for deviation

measure of damages

-cost to bring object of contract into compliance if cost is reasonable under circumstances

-value received-value contracted

-same value =0

-if cost unreasonable (tearing down walls) difference between value of performance rendered and performance that should be rendered

material breach of contract

-breach of contract: nonperformance of ANY contractual contract

-material breach: when performance not at least substantial

-party who totally fails to perform is not discharged and is liable for damages for breach of contract

-other party discharged and need not hold themselves ready to perform

-if minor nonmaterial breach-breaching party liable for damages if breach not cured

-nonbreaching party not discharged and is required to perform

anticipatory repudiation of contract

-before performance is due

-when one party refuses to perform contract before performance date

-if one party repudiates (refuses to perform) contract treated as present material breach of contract

-nonbreaching party can: sue immediately, seek similar contract elsewhere, or wait and see if alleged breach happens and sue then

-if seeking similar contract can sue original if similar contract not completed satisfactory

discharge by agreement

-discharge by mutual recission

-discharge by novation

-discharge by accord and satisfaction

discharge by mutual recission

-unliquidated debt

-both parties agreeing to walk away

-one party performed-receive something new before recission

discharge by novation

-third person is substituted for one of the original parties with the consent of the party entitled to receive performance

-original obligation if prior party is extinguished and prior party is discharged

-giving money to accept money from someone else since son injured

discharge by accord and satisfaction

-unliquidated debt

-accord is executory contract to perform some act in order to satisfy existing contractual obligation

-have to have CONSIDERATION

-satisfaction is performance/execution of accord agreement

discharging

by performance

by law

by agreement

discharge by operation of law

-material alteration of contract

-statutes of limitations

-bankruptcy

discharge by impracticality/impossibility of performance

material alteration of contract

-if not material than substantive performance and valid

-one party materially changing terms without other partys consent-written contract

statutes of limitations

-provide that a person who has a cause of action must bring lawsuit within specified time frame

-failure to commence action/suit within period bars access to judicial remedies but does not distinguish debt or underlying obligation

bankruptcy

-discharges debt even if creditor not paid

-must list all debts

-partial payment doesnt impact anything

discharge by impossibility or impracticability

-impossibility of performance

-commercial impracticability

impossibility of performance

-objectively impossible

-death/serious injury/incapacitation of party who was to render personal services

-destruction of specific subject matter

-change in law making performance illegal

commercial impracticability

-more burdensome to perform-extreme, unusual

ex: wedding venue reception and electrivity goes out