Chapter 11: Discharge and Breach

What is discharge by performance?

The fulfillment of contractual obligations.

What does it mean if a contract is discharged by agreement?

Parties mutually agree to terminate the contract.

What is an option to terminate in a contract?

A unilateral right allowing one party to discharge the contract.

What is a condition subsequent?

A contract ends if a specified event occurs.

What is a true condition precedent?

A contract exists only if a specified event occurs.

What is the difference between an executory contract and an executed contract?

An executory contract is not fully performed, while an executed contract is fully performed.

What is rescission in contract law?

An agreement to terminate an existing contract.

What does accord and satisfaction refer to?

A new agreement where a party gives up the right to demand performance for a new benefit.

What is a release in contract terms?

Discharge under seal, allowing termination without fresh consideration.

What is novation?

Discharging an old contract and replacing it with a new one.

What is a waiver in contract law?

Abandonment of the right to performance, enforceable without consideration.

What is a breach of contract?

Failure to fulfill a contractual promise.

What distinguishes a condition from a warranty in contracts?

A condition is a substantial term, while a warranty is a lesser term.

What is an intermediate term in contract law?

A term whose importance is uncertain and may be treated as a condition or warranty based on circumstances.

What is defective performance?

Failure to properly perform a contractual obligation.

What is deviation in contract terms?

Failure to act precisely as agreed in a contract for transportation.

What is anticipatory breach?

Indication that a breach will occur in the future, allowing the innocent party to act immediately.

What is self-induced impossibility?

A party renders performance impossible, unlike frustration where neither party is at fault.

What happens when a contract is discharged for breach?

Parties are relieved of future performance obligations, but the contract remains for liability purposes.

What is the significance of a tender of payment?

Debtors must tender payment in a reasonable manner, and creditors can insist on legal tender.

What is the general rule regarding tender of performance?

Obligations must be exactly performed, but substantial performance may discharge the contract.

What is the effect of a condition precedent?

–Contract automatically created if event occurs

–No further agreement by parties needed

–Contract does not exist, and therefore no obligation to perform, unless event occurs

What is the role of consideration in variation of contracts?

Consideration is required for enforcement of small changes to existing contracts.

What does it mean if a contract is executory on both sides?

Neither party has fully performed its obligations under the contract.

What is a boilerplate clause in a contract?

A standard clause that may change the time of performance to be of the essence.

What is the purpose of defining types of terms in a contract?

To guard against difficulties in distinguishing between conditions, warranties, and intermediate terms.

What is the legal implication of a contract being frustrated?

The contract becomes impossible to perform, leading to discharge by operation of law.