Contracts II: Breach—Part 1

Vocabulary flashcards covering essential terms and concepts related to contract breach, substantial performance, material breach, and relevant case law.

Breach of Contract

Any unjustifiable non-performance of a duty under a contract.

Immaterial Breach

A partial breach where the non-breaching party must still perform but may sue for monetary losses.

Substantial Performance

Occurs when there are trivial deficiencies in the quantity or quality of performance.

Material Breach

Failure to perform a significant performance obligation.

Total Breach

An uncured material breach that allows the non-breaching party to terminate the contract.

Jacob & Young v. Kent

A case illustrating substantial performance and how damages are measured.

Sackett v. Spindler

A case illustrating how material breach can turn into a total breach.

Monetary Damages

Compensation sought by the non-breaching party for losses resulting from a breach.

Cure Opportunity

A reasonable amount of time given to the breaching party to correct their performance.

Diminution in Market Value

Measure of damages based on the decrease in value of the property due to the breach.

Materiality Analysis

Assessment to determine whether a breach is material based on several factors.

Notice & Cure Provisions

Contract clauses requiring notice of breach and opportunity to cure before the non-breach party may act.

Line-Drawing Exercise

Determining where a breach falls on the scale from substantial to total.

Replacement Cost

Costs incurred to replace a defective performance, an important measure in breach cases.

Restatement (Second) of Contracts

A legal treatise that outlines principles of contract law, often referenced in case law.

Performance Obligation

A duty that one party has to fulfill under the terms of a contract.

Consequential Damages

Additional damages that occur as a foreseeable result of a breach.

Benefit of the Bargain

The expected benefit that a party should receive from fulfilling the contract.

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Trivial Deficiencies

Minor defects or shortcomings that do not usually amount to a material breach.

Rest.2d § 241

1. Deprival of benefit

2. Adequate compensation for injured party

3. Forfeiture to breaching party

4. Likelihood of cure

5. Good faith and fair dealing

Opportunity to Cure

The right of a breaching party to remedy their failure before being held liable.

Economic Loss Rule

A principle barring recovery for purely economic loss absent personal injury or property damage.

K (Contract)

Abbreviation for a contract, used frequently throughout legal discussions.

Substantial Performance Doctrine

Legal principle stating that if a party has substantially performed, they may still be entitled to payment.

Measure of Damages (Dx)

The method used to calculate compensation resulting from a breach.

Substitute Arrangements

Alternative means of fulfilling contractual duties when a party breaches.

Totality of Circumstances

A legal standard that considers all relevant factors in determining contract breaches.

Insignificant Deficiencies

Minor breaches that do not significantly impact the contract's overall purpose.

Construction Contract

A contract that stipulates the construction or renovation terms and obligations.

Contract Language

Specific wording and terms outlined within a contract document.

Firm Deadline

A non-negotiable due date or time frame agreed upon in a contract.

Tangible Incidents of Breach

Actual physical or financial consequences resulting from a breach.

Breach Notification

Communication from the non-breaching party informing the breaching party of the breach.

Jurisdictional Case Law

Legal precedents within a specific jurisdiction that influence contract enforcement.

UCC

Uniform Commercial Code, which governs commercial transactions and contracts.

Unjust Enrichment

A legal principle stating that one party should not benefit at another’s expense without compensating them.

Rest.2d 242

A material breach becomes total when it is not rxble to make the non-breaching party wait any longer or when a breaching party has failed to cure. Rule for determining whether opportunity to cure has passed, giving rise to a total breach. Result of delay (R.2d 242(b), (c)) ◦Does the delay harm the non-breaching party’s ability to make substitute arrangements? ◦Is performance without delay important?

Rest.2d 237

Nonbreaching party may suspend performance while giving the breaching party a rxbleamount of time to cure defective performance,