Helix BBQ: Contract Law-Performance, Breach, and Discharge – Breach with Explanations

 One of the parties to a contract delayed in rendering performance.

Which of the following would NOT be a factor in determining whether the injured party’s duty to perform has been discharged by the other party’s delay?

C.The extent to which both parties profited from the contract.

Solution: The correct answer is C.

Answer option C is correct. A party’s delay in rendering performance may constitute a material failure to perform under the contract and may discharge the injured party’s duty to perform. To determine whether there has been a material breach, a court will consider the extent to which the delay has deprived the injured party of the benefit of the bargain and the extent to which the injured party can be compensated for that deprivation. If a delay constitutes a material breach, the court will then determine whether the breach discharges the injured party’s duty to perform, taking into account the factors that were considered in finding a breach as well as the extent to which the delay may prevent or hinder the injured party in making reasonable substitute arrangements and the circumstances indicating that timely performance was important.

Under the UCC, what is the default statute of limitations period for breach of contract?

A.Four years after the cause of action accrues.

Solution: The correct answer is A.

Answer option A is correct. Under the UCC, the statute of limitations period for breach of contract is four years after the cause of action has accrued. The parties are free to extend or reduce this period by contract, but they may not set it at less than one year. In general, the cause of action accrues when the breach occurs.

 The buyer in a sales agreement had reasonable grounds to believe the seller would not perform.

Which option below is available to the buyer?

B.Temporarily suspend performance.

Solution: The correct answer is B.

Answer option B is correct. The party that has reasonable grounds to believe the other will fail to perform has the right only to temporarily suspend performance and request assurance that the other party’s performance will not be impaired.

To qualify as an anticipatory repudiation, a communication must be all EXCEPT which of the following?

D.Unexpected.

Solution: The correct answer is D.

 

Answer option D is correct. To qualify as an anticipatory repudiation, a communication must be absolute, definite, unequivocal, and involve the entire performance.

 Which of the following is NOT a factor used in determining whether there has been substantial performance?

D.The extent to which unusual circumstances impacted performance.

Solution: The correct answer is D.

Answer option D is correct. The relevant factors in determining whether there has been substantial performance include (1) the extent to which the injured party will be deprived of the reasonably expected benefit, (2) the extent to which the injured party can be adequately compensated for the deprived benefit, (3) the extent to which the breaching party will suffer forfeiture and hardship, (4) the likelihood the breaching party will cure the failure, taking into account all circumstances and reasonable assurances, and (5) the extent to which the breaching party's conduct comports with standards of good faith and fair dealing.