Conditions
What are the three timing labels for conditions?
Precedent
Subsequent
Concurrent
What is forfeiture?
The natural consequence of the failure of a condition.
What is it?
When a party to a contract communicates that they are not going to perform as promised.
What does it mean?
Three circumstances where discharge will relieve a party of the duty to perform.
What are damages?
The way we measure the amount of money owed to the non-breaching party.
To place the non-breaching party in the same position they would have been in had the contract been performed as promised.
based on individual taste and personal judgement.
What is the basic rule with the failure of a condition?
The law will let things run their course unless it would result in an extreme forfeiture.
What needs to be communicated?
doubts or second thoughts is not enough.
What is impossibility?
destruction of subject matter.
illegality of subject matter that arises after formation but prior to completion.
Death or illness of personal performer.
What is a mitigation of damages?
There is no recovery for post-breach losses caused by the non-breaching party not acting as a reasonable person.
What is the ONLY way that express conditions can be satisfied?
Strict compliance
What are the two tests for relief?
1) The objective Test
2) Waiver
What are adequate assurances?
with reasonable grounds for insecurity, a party may demand adequate assurances of performance.
The party may suspend performance until assurance is received.
Failure to provide assurances within a reasonable time is repudiation.
What is frustration of purpose?
Neither impossibility nor impracticability.
it is not impossible to perform, it is also not difficult or expensive.
circumstances have changed and the purpose in creating the contract is no longer possible.
What are expectation damages?
an attempt to put the non-breaching party in the same position they'd be in if the breach hadn't occurred.
1) caused by defendant
2) foreseeable
3) certain, not speculative
4) unavoidable (mitigation of damages)
What is the only exception to the good faith rule of conditions of satisfaction?
The approval of a party's attorney, which can be withheld for any reason and disapproval is final.
What is waiver?
The conduct of one party has led the other party to believe that the failure to comply with the condition is of no concern.
Can the party who receives an unequivocal communication of the intent to not perform change their mind?
YES.
When does frustration of purpose not work?
If part of the purpose remains possible the frustration of purpose will not discharge the duty to perform.
What are compensatory damages?
Based on economic loss suffered by the plaintiff.
measured by the P's expectation when the contract was drafted, as the parties intended.
The"benefit of the bargain"- the losses caused by the breach and the gains were prevented by the breach.
What is wrongful prevention?
A form of bad faith where someone interferes with another party exercising their judgement.
What is the objective test?
1) whether the failure to act as required was simple negligence or gross negligence
2) whether the delay is slight
3) Whether the loss to the other party is small.
What are the three approaches available when a party receives communication of an unequivocal intent not to perform.
1) Treat it as a breach and sue immediately.
2) Suspend performance and wait to sue until the date for performance has lapsed, then sue.
3) Ignore it and encourage the other party to perform.
What is impractiability?
Occurrence of a condition that makes it extremely difficult or expensive.
What are consequential damages?
arise indirectly from the breach.
awarded because of special circumstances (lost profits)
reasonably foreseeable at the time of contract formation.
arise from the special circumstances that the defendant knew or had reason to know of.
reasonably certain.