ACGT 355 Chapter 17

Conditions

an event whose occurrence or nonoccurrence affects a duty or performance.

Express Condition

contingency explicitly set forth in language.

Satisfaction

express condition making performance contingent upon one party's approval of the other's performance.

Subjective Satisfaction

approval based upon a party's honestly held opinion.

Objective Satisfaction

approval based upon whether a reasonable person would be satisfied.

Implied-in-Fact Conditions

contingency understood by the parties to be part of the agreement, though not expressed.

Implied-in-Law Conditions

contingency not contained in the language of the contract but imposed by law; also called a constructive condition.

Concurrent Conditions

conditions that are to take place at the same time.

Conditions Precedent

an event that must or must not occur before performance is due.

Conditions Subsequent

an event that terminates a duty of performance.

Discharge

termination of a contractual duty.

Performance

fulfillment of a contractual obligation resulting in a discharge.

Definition of a Breach

a wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party.

Material Breach

nonperformance that significantly impairs the injured party's rights under the contract, and discharges the injured party from any further duty under the contract.

Prevention of Performance

one party's substantial interference with or prevention of performance by the other; constitutes a material breach and discharges the other party to the contract.

Perfect Tender Rule

standard under the Uniform Commercial Code that a seller's performance under a sales contract must strictly comply with contractual duties and that any deviation discharges the injured party.

Substantial Performance

performance that is incomplete but that does not defeat the purpose of the contract; does not discharge the injured party but entitles him to damages.

Anticipatory Repudiation

an inability or refusal to perform, before performance is due, that is treated as a breach, allowing the nonrepudiating party to bring suit immediately.

Material Alteration of Written Contract

a material and fraudulent alteration of a written contract by a party to the contract; discharges the entire contract.

Mutual Rescission

an agreement between the parties to terminate their respective duties under the contract.

Substituted Contract

a new contract accepted by both parties in satisfaction of the parties' duties under the original contract.

Accord and Satisfaction

substituted duty under a contract (accord) and the discharge of the prior contractual obligation by performance of the new duty (satisfaction).

Impossibility

performance of contract cannot be done.

Subjective Impossibility

the promisor - but not all promisors - cannot perform; does not discharge the promisor.

Objective Impossibility

no promisor is able to perform; generally discharges the promisor.

Destruction of Subject Matter

Will discharge contract if it occurs without the promisor's fault.

Subsequent Illegality

If performance becomes illegal or impractical as a result of a change in the law, the duty of performance is discharged.

Frustration of Purpose

Principal purpose of a contract cannot be fulfilled because of a subsequent event.

Commercial Impracticability

Where performance can be accomplished only under unforeseen and unjust hardship, the contract is discharged under the Code and the Restatement.

Bankruptcy

Discharge available to a debtor who obtains an order of discharge by the bankruptcy court.

Statute of Limitations

After the statute of limitations has run, the debt is not discharged, but the creditor cannot maintain an action against the debtor.