Contracts performance


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Contracts performance

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Contracts performance

  1. 1. Contracts Performance and Discharge
  2. 2. Introduction <ul><li>How does a party know when his or her obligations under the contract are at an end? </li></ul><ul><li>A party may be discharged from a valid contract by: </li></ul><ul><ul><li>A condition occurring or not occurring. </li></ul></ul><ul><ul><li>Full performance or material breach by the other party. </li></ul></ul><ul><ul><li>Agreement of the parties. </li></ul></ul><ul><ul><li>Operation of law. </li></ul></ul>
  3. 3. §1: Conditions <ul><li>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. </li></ul>
  4. 4. Conditions <ul><li>Types of Conditions: </li></ul><ul><ul><li>Conditions Precedent. </li></ul></ul><ul><ul><li>Conditions Subsequent. </li></ul></ul><ul><ul><li>Conditions Concurrent. </li></ul></ul><ul><ul><ul><li>Express. </li></ul></ul></ul><ul><ul><ul><li>Implied in Fact. </li></ul></ul></ul><ul><ul><ul><li>Implied in Law. </li></ul></ul></ul>
  5. 5. §2: Discharge by Performance <ul><li>The contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised. </li></ul><ul><li>Types of Performance: </li></ul><ul><ul><li>Complete Performance. </li></ul></ul><ul><ul><li>Substantial Performance (minor breach). </li></ul></ul><ul><ul><li>Performance to the Satisfaction of One of the Parties or a Third Party. </li></ul></ul><ul><li>Case 16.1: Jacobs & Young v. Kent (1921). </li></ul>
  6. 6. Material Breach of Contract <ul><li>Breach of Contract - the nonperformance of a contractual duty. </li></ul><ul><li>Material breach occurs when there has been a failure of consideration. Discharges the nonbreaching party from the contract. </li></ul>
  7. 7. <ul><li>In a non-material breach, the duty to perform is not excused and the non-breaching party must resume performance of the contractual obligations undertaken. </li></ul><ul><li>Case 17.2: Van Steenhouse v. Jacor Broadcasting of Colorado, Inc. (1998). </li></ul>Material Breach of Contract
  8. 8. Anticipatory Repudiation <ul><li>If before performance is due, one party refuses to perform his or her contractual obligation. </li></ul><ul><li>Results in material breach. </li></ul>
  9. 9. Anticipatory Repudiation <ul><li>The nonbreaching party should not be required to remain ready and willing to perform when the other party has repudiated the contract. </li></ul><ul><li>The nonbreaching party should have the opportunity to seek a similar contract elsewhere. </li></ul><ul><li>Time For Performance. </li></ul><ul><ul><li>Case 16.3: Manganaro Corp v. Hitt Contracting Inc. (2002). </li></ul></ul>
  10. 10. §3: Discharge by Agreement <ul><li>Discharge by Rescission. </li></ul><ul><li>Discharge by Novation. </li></ul><ul><ul><li>Previous Obligation. </li></ul></ul><ul><ul><li>All parties agree to new contract. </li></ul></ul><ul><ul><li>Extinguishment of old obligations. </li></ul></ul><ul><ul><li>New Contract Formed. </li></ul></ul><ul><li>Discharge by Substituted Agreement. </li></ul><ul><li>Accord and Satisfaction. </li></ul>
  11. 11. §4: Discharge by Operation of Law <ul><li>Alteration of The Contract. </li></ul><ul><li>Statutes of Limitations. </li></ul><ul><li>Bankruptcy. </li></ul><ul><li>Impossibility or Impracticability.  </li></ul>
  12. 12. Impossibility or Impracticability of Performance <ul><li>Objective Impossibility of Performance. </li></ul><ul><ul><li>Death or incapacitation prior to performance; </li></ul></ul><ul><ul><li>Destruction of the Subject Matter; or </li></ul></ul><ul><ul><li>Illegality in performance. </li></ul></ul><ul><li>Commercial Impracticability. </li></ul><ul><ul><li>Key: Circumstances not foreseeable. </li></ul></ul><ul><ul><li>Case 16.4: Cape-France v. Estate of Peed (2001). </li></ul></ul><ul><li>Frustration of Purpose. </li></ul><ul><li>Temporary Impossibility. </li></ul>
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