BUS 204 Ch. 18

impossibility of performance

A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes impossible or totally impracticable (through no fault of either party).

discharge in bankruptcy

The release of a debtor from all debts that are provable, except those specifically excepted from discharge by statute.

tender

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so.

discharge

(1) The termination of an obligation, such as occurs when the parties to a contract have fully performed their contractual obligations. (2) The termination of a bankruptcy debtor's obligation to pay debts.

What is an example of commercial impracticability?

Tariffs quadruple on a key raw material, making the manufacturing of a product very expensive.

condition precedent

A condition in a contract that must be met before a party's promise becomes absolute.

What must a party show to win a substantial performance lawsuit? Choose 2 answer choices.

1. He or she acted in good faith. 2. The breach was not intentional.

What is the difference between commercial impracticability and frustration of purpose? Choose 2 answer choices.

1. One focuses on the reasons why the parties entered into the contract. 2. One focuses on the challenges in performing the contract.

What is the evaluation standard for a personal satisfaction contract? Choose 2 answer choices.

1. Subjective personal taste 2. Objective, reasonable person standard

What are the legal differences between a material breach and an immaterial breach of contract? Choose 2 answer choices.

1. The level of the performance of the contractual obligations 2. Whether the court will discharge the contract

What are the types of situations that may qualify as grounds for discharge due to impossibility? Choose 3 answers.

1. The specific subject matter of the contract is destroyed. 2. A party to a personal contract dies or becomes incapacitated. 3. The subject matter of the contract becomes illegal.

What elements are required for an offer to be effective under the common law? Choose 3 answers.

1. The terms of the offer must be reasonably definite so that all parties understand them. 2. The offer must be communicated to the offeree. 3. The offeror must intend to be bound by the offer.

What is the standard to which most personal satisfaction contracts must adhere? Choose 2 answers.

1. satisfaction of the receiving party (buyer) 2. satisfaction of a reasonable person

condition subsequent

A condition in a contract that operates to terminate a party's absolute promise to perform.

frustration of purpose

A court-created doctrine under which a party to a contract will be relieved of his or her duty to perform when the objective purpose for performance no longer exists (due to reasons beyond that party's control).

commercial impracticability

A doctrine under which a seller may be excused from performing a contract when (1) a contingency occurs, (2) the contingency's occurrence makes performance impracticable, and (3) the nonoccurrence of the contingency was a basic assumption on which the contract was made.

What is the difference between a material breach and an immaterial breach?

A material breach results in damages to the non-breaching party, while an immaterial breach is minor.

condition

A possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract.

mutual rescission

An agreement between the parties to cancel their contract, releasing the parties from further obligations under the contract. The object of the agreement is to restore the parties to the positions they would have occupied had no contract ever been formed.

anticipatory repudiation

An assertion or action by a party indicating that he or she will not perform an obligation that he or she is contractually obligated to perform at a future time.

concurrent conditions

Conditions in a contract that must occur or be performed at the same time; they are mutually dependent. No obligations arise until these conditions are simultaneously performed.

Logan agrees to deliver fifty pounds of crab claws to Dominique by May 15. Dominique needs the crab claws for a wedding party that Dominique is catering on May 16, so time is of the essence of the contract. Logan contacts Dominique on May 15 and tells Dominique that the earliest Logan can deliver the crab claws is on May 17. Dominique cancels the order and quickly makes other arrangements for the wedding party she is catering. Logan then demands payment from Dominique for the full contract price, and Dominique refuses. If Logan sues Dominique for damages under the contract:

Dominique will not have to pay because Logan breached the contract.

performance

In contract law, the fulfillment of one's duties arising under a contract; the normal way of discharging one's contractual obligations.

Korbyn enters into a contract with Peyton to sell Peyton a 1956 roadster. The contract has a condition precedent that the roadster will pass inspection by an independent appraiser, verifying that the roadster contains all original parts and is in good working order. This contract provision means that:

Peyton is not required to perform under the contract until the appraisal is complete.

How is substantial performance involved with the classification of material breaches versus immaterial breaches?

Substantial performance involves an immaterial breach.

breach of contract

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

What does the law require for a personal service contract?

The personal service requirement must be stated.

novation

The substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated. Typically, there is a substitution of a new party who is responsible for the contract and the removal of an original party's rights and duties under the contract.

In what situation could a party enforce strict performance?

When the requirement is reasonable

You agree to paint your neighbor's house for a certain price. You get ninety percent of the painting done and then have to leave town for your real job. Your neighbor is pretty mad because you didn't finish the job, and says she is not going to pay you a penny! What do you think will happen when you try to collect payment from your neighbor for painting her house?

You will probably receive the price you agreed on, less the amount it will take for her to have the painting finished.

What type of condition specifies an event that must happen before a person is obligated to perform the duties specified in the contract?

a condition precedent

When may a contract be modified?

at any time, if the parties are in agreement

Jayden is restoring a house for Jane when Hurricane Emma hits and washes out the foundations of the house. The cost for restoration has just increased by 400%. Under what principle may Jayden's obligations be excused?

commercial impracticality

In January, Victor contracted with Delrita to cater a Cinco de Mayo (May 5th raised to the th power) party for 500 of his closest friends. Neither of them anticipated that their entire state would be under stay-at-home orders on May 5 due to a global pandemic. Under what principle may Victor cancel his contract with Delrita?

frustration of purpose

Sylvia agrees to deliver one hundred computers to Ralph's Tech Store by Saturday. On Friday, Sylvia delivers ninety-nine computers. Ralph's Tech Store refuses to accept the shipment and accuses Sylvia of breaching the contract. By not delivering the entire one hundred computers, Sylvia:

has not materially breached the contract and will be allowed the opportunity to cure by providing the one remaining computer.

Ben and Jerry have an agreement whereby Ben will deliver ice cream for Jerry to all of Jerry's retail customers for the next three years. After delivering ice cream for the first nine months, Ben decides that this is not how he wants to spend his time. Ben does not want to let Jerry down, though, so he contacts his buddy Baskin about delivering the ice cream. To protect Jerry from liability, the contract that the parties need to form to transfer the rights and duties under the contract to Baskin and relieve Ben from all responsibility should be a(n):

novation.

Landscape Supply agrees to provide Delta Lawn Service eight pallets of sod for the price of $260 per pallet. The agreement contains the following provision: "This Agreement may not be amended or modified except by an instrument in writing signed by the party to be charged with such amendment or modification." Delta decides it now needs 160 pallets of sod, and Landscape is willing to reduce the price to $255 per pallet because of the increased amount. Delta and Landscape can accomplish this change to the contract by:

signing an amendment, crossing out the incorrect language and replacing it by hand with the correct terms, or rewriting the entire contract to include the changed provisions.

What is the most common way that duties under a contract are discharged?

by performance

What is the term for when a party to a contract performs his duties exactly according to the terms of the contract?

strict performance