Performance discharges in law


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Performance discharges in law

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Performance discharges in law

  1. 1. Performance and Discharge CHAPTER 17
  2. 2. Quote of the Day <ul><li>“ If you can’t give me your word of honor, will you give me your promise? ” </li></ul><ul><li>Samuel Goldwyn, </li></ul><ul><li>Hollywood producer </li></ul>
  3. 3. Discharge <ul><li>A party is discharged when she has no more duties under a contract. </li></ul><ul><li>Most contracts are discharged by full performance. </li></ul><ul><li>Sometimes the parties discharge a contract by agreement. </li></ul><ul><li>Rescind means that they terminate it by mutual agreement. </li></ul>
  4. 4. Conditions <ul><li>A condition is an event that must occur before a party becomes obligated under a contract. </li></ul><ul><li>How Conditions are Created </li></ul><ul><ul><li>Express Conditions -- No special language is necessary to create the condition, but it must be stated clearly somehow. </li></ul></ul><ul><ul><li>Implied Conditions – The condition is not stated, but is clear from the agreement. </li></ul></ul>
  5. 5. Types of Conditions <ul><li>Condition Precedent </li></ul><ul><ul><li>Must occur before a duty arises. </li></ul></ul><ul><li>Condition Subsequent </li></ul><ul><ul><li>Must occur after the particular duty arises. </li></ul></ul><ul><li>Concurrent Conditions </li></ul><ul><ul><li>Certain things must occur simultaneously. </li></ul></ul>
  6. 6. Performance <ul><li>Strict Performance </li></ul><ul><ul><li>Performance that is exactly what promised; is usually not expected and failure to do so does not cause for discharge. </li></ul></ul><ul><li>Substantial Performance </li></ul><ul><ul><li>A party that substantially performs its obligations will receive the full contract price, minus the value of any defects. </li></ul></ul><ul><ul><li>A party that fails to perform substantially receives nothing on the contract and will only recover the value of the work, if any. </li></ul></ul>
  7. 7. Personal Satisfaction Contracts <ul><li>A personal satisfaction contract is one which the promisee makes a personal, subjective evaluation of the promisor’s performance. </li></ul><ul><ul><li>A court uses a subjective standard only if assessing the work involves feelings, taste, or judgment and the contract explicitly demands personal satisfaction. </li></ul></ul><ul><ul><li>In all other cases, a court applies an objective standard to the decision. </li></ul></ul>
  8. 8. Good Faith <ul><li>The Restatement (Second) of Contracts §205 states: “Every contract imposes upon each party a duty of good faith and fair dealings in its performance and its enforcement.” </li></ul>
  9. 9. Time of the Essence Clauses <ul><li>A time of the essence clause will generally make contract dates strictly enforceable. </li></ul><ul><li>Merely including a date for performance does not make time of the essence. </li></ul>
  10. 10. Breach <ul><li>Material Breach </li></ul><ul><ul><li>Generally courts will discharge only if a party committed a material breach. </li></ul></ul><ul><li>Anticipatory Breach </li></ul><ul><ul><li>Anticipatory breach is committed by one party making it unmistakably clear that he will not honor the contract. </li></ul></ul><ul><li>Statute of Limitations </li></ul><ul><ul><li>Will limit the time within which the injured party may file suit. </li></ul></ul>
  11. 11. Impossibility <ul><li>True Impossibility </li></ul><ul><ul><li>Something has happened making it utterly impossible to fulfill the promise. </li></ul></ul><ul><li>Commercial Impracticability </li></ul><ul><ul><li>Some event has occurred that neither party anticipated, making the contract extra-ordinarily difficult and unfair to one party. </li></ul></ul><ul><li>Frustration of Purpose </li></ul><ul><ul><li>Some event has occurred that neither party anticipated and the contract now has no value for one party. </li></ul></ul>
  12. 12. “ Good faith and reasonable conduct will prevent many contract disputes.”