What are the six ways to discharge contract duties?
1. Complete Performance
2. Material Breach
3. Occurrence of Failure of a Condition
4. Agreement of the Parties
5. Discharge by Operation of Law
6. Compliance with a Court-Ordered Remedy
What is Substantial Performance?
-When there is a breach of contract but it is minor in light of the entire contract
Ex. If a house is built but the cabinets installed are a little cheap the contract is still substantially performed and must be paid for minus differences in cabinets
What is Material Breach?
-Failure to fulfill a contractual obligation which is important in light of the entire contract
Ex. If a house is built on a concrete slab instead of with a basement
What is Immaterial Breach?
-Failure to fulfill a contractual obligation which is unimportant in light of the entire contract
Ex. The breaching party has fulfilled substantial performance
What is a satisfaction clause?
-Requires on party to perform the contract to the satisfaction of the other party
Ex. Contract to paint my portrait (Any contract involving taste rather than function)
What is a "time is of the essence clause?"
-If "" used indicates time of performance is essential so any time delays will be considered a material breach
Ex. If you deliver champaign a day after the wedding
What is an anticipatory repudiation?
-Material breach which occurs when, prior to the time performance is due, one party inform the other it will not perform the contract
Ex. Free to obtain a substitute for contract before the time for fulfillment was originally due
What is a condition precedent?
-Condition which must be fulfilled prior to a duty arising under contract
Ex. If wreck car, must present wrecked car to insurance adjuster for damage assessment before recovering collision insurance payment
What is a condition subsequent?
-Relieves a contractual duty after a certain even occurs
Ex. Farmer has to deliver crops to feed company unless he notifies company of drought before Aug. 1st...on July 20 farmer notified company of drought
What is a concurrent condition?
-When both parties' performance is conditioned on the others' simultaneous performance
Ex. Simultaneous transfer: You must deliver the goods I am buying and I must pay you at that moment in time
What are the four ways to discharge a contract by agreement of the two parties?
1. Voluntary Rescission
3. Accord and satisfaction
What is voluntary rescission?
-When all parties to the contract agree to cancel it.
What is novation?
-When parties agree to cancel the old contract and enter a new one
What is an accord and satisfaction?
When there is an agreement (accord) by one party to accept a performance which is different from that required by the contract, followed by the completion (satisfaction) of that performance by the other party
What is a waiver?
-A voluntary acceptance by one party of the inadequate performance of the other
Ex. If house built has some cabinets that don't open but other extra items were added and you agree to still accept the house
What is intervening illegality?
-When an agreement between two contracting parties becomes illegal between the time the contract is entered and the time performance is complete.
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