BUS 230 chapter 18

Statute of limitations

A statutory time limit within which an injured party must file suit

Condition

An event that must occur before a party becomes obligated under a contract

3 types of Conditions

Condition precedent Condition subsequent Concurrent conditions

Time is of the essence clause

Generally makes contract dates strictly enforceable

What must a party show to win a substantial performance lawsuit?

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

Substantially performs

Occurs when one party fulfills enough of its contract obligations to warrant payment

Personal satisfaction contract

Permits the promisee to make subjective evaluations of the promisors performance

What happens when a party fails to perform substantially

Receives nothing on the contract itself and will recover only the value of the work

Strict performance

Requires one party to perform its obligations precisely, with no deviation from the contract terms

True impossibility

Something has happened making it literally impossible to do what the promisor said he would do

What is the evaluation standard for a personal satisfaction contract?

Subjective personal taste Objective, reasonable person standard

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

Substantial performance involves an immaterial breach

Discharged

The debtor no longer has an obligation to pay a debt

What are the legal differences between a material breach and an immaterial breach of contract

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

What happens when one party breaches a contract

The other party is discharged

What does the law require for a personal service contract?

The personal service requirement must be stated.

Rescind

To terminate a contract by mutual agreement

Most contracts are discharged by full performance

True

In what situation could a party enforce strict performance?

When the requirement is reasonable When the parties specifically agree to it in the contract

Commercial impracticability

some unexpected event has made it extraordinarily difficult and unfair for one party to perform its obligations

Frustration of purpose

when an unexpected event renders a contract completely useless to one party