CONTRACTS JEOPARDY

Conditions

100

What is the difference between promise and condition? 

- A promise is a duty to perform 

- A condition is an event that triggers a duty to perform 

200

What are the charecteristics of contructive conditions? (2)

- Allow the court to determine when each party must perform 

- Do not require strict compliance but substantial performance instead

300

What are the characteristics of an express condition? (3)

- Parties intent to include a condition must be clear and unambiguous 

- If there is doubt about whether it is condition, it will be considered a promise

- There needs to be strict compliance when it comes to satisfied or not satisfied

400

What is an express condition?

Contained in the terms of the contract 

500

What is a constructive condition?

Implied by the law and are not expressly stated in the contract

Material Breach

100

What is a breach

1) full performance of a duty under a contract discharged a duty 

2) When performance of a duty under a contract is due, any nonperformance is a breach

200

What are the factors according to the restatement to determine whether a failure is a breach?

• The extent to which the injured party will be deprived of the benefit which he reasonable expected to
• The extent to which the injured party can be adequately compensation for the part of that benefit of which he will be deprived
• The extent to which the party failing to perform or to offer to perform will suffer forfeiture
• The likelihood that the party failing to perform or to offer to perform will cure his failure; taking account of all the circumstances including any reasonable assurances
• The extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing

300

If something is not a material breach, it would then be:

- Substantial performance 

- Complete performance  

400

What is a material breach?

Significant failure by one party to fulfill a contractual obligation 

500

What are NBP responsibilities for material breach?

NBP does not have a duty to perform 

Doctrine of Substantial Performance

100

What is doctrine of substantial performance?

Satisfies the constructive condition, although the injured party may be entitled to damages for the harm caused by the breach 

200

What is NBP responsibility?

NBP may still have a duty to perform

300

What does substantial performance mean?

- Performed most contractual duties as to give other party a substantial benefit but imperfect performance

- Results in a minor breach and if the party was acting in good faith, non-breaching party must perform

- Minor breaches can be cured 

400

What is the extent of nonperformance with substantial breach?

Imperfect performances deficiencies in performance that are not material 

500

True or false: NBP may withhold performance and terminate the K and seek damages (or other remedy)

FALSEEEE

Excusing Conditions

100

What is prevention  

- Every contract implies a promise of a good faith and fair dealing 

- When a party causes the condition not to occur or otherwise has breached her duty of good faith in connection with the occurrence of the condition

200

What is waiver?

Party unintentional relinquishes a known right, mistakes or fails to disclose a fact and the other party justifiably and determinately relies on the impression created, or reliance on an implied waiver 

300

What is modification?

Post contract agreement that changes the conditions/ obligation of the parties 

400

What is divisibility? 

If performance falls short of substanial performance, divisibility can avoid forfeiture and allow recovery on the contract

500

What is forfeiture? 

: Can be excused for non-occurrence of a condition if:

• The failure of the condition would cause substantial harm to the party who needed to comply with the condition and as charged with its non-occurrence
• the condition was not material (significant) part of the exchange to the party whose performance was dependent on the occurrence of the condition

Excuses

100

What is unilateral mistake?

Elements of unliteral mistake:

• One party made a mistake
• About a fact that was basic assumption upon they made the contract
• The mistake has a material effect on the exchange
• The party did not bear the risk of that mistake, AND
• Enforcement would be unconscionable (oppression and surprise result from mistake)
• The other party had reason to know of the mistake (obvious error)
• The other party’s fault causes the mistake

200

What is mutual mistake?

Elements of Mutual Mistake:

• Both parties, at contract formation, made a mistake
• About a fact that was basic assumption upon which they made the contract
• The mistake has a material effect on the exchange, and
• The party did not bear the risk of that mistake

300

What is impossibility?

Event can no longer be possible

400

What is impracticability

Change in circumstance results in extreme and unreasonable difficulty, expense injury, or loss

• Differs from impossibility because performance is arguably possible

500

What is frustration?

Change between this is again the third element:

• Substantially frustrated 
• Performance is neither impossible nor impracticable
• Instead, continued performance is worthless/ meaningless to the other party
• Only provides for “discharge of remaining duties to render performance” unless the language or the circumstances indicate to the contrary