© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. “If you can’t give me your word of honor, will you give me your promise? ” Samuel Goldwyn, Hollywood producer

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A party is discharged when she has no more duties under a contract.  Most contracts are discharged by full performance.  Sometimes the parties discharge a contract by agreement.  Rescind means that they terminate it by mutual agreement.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A condition is an event that must occur before a party becomes obligated under a contract.  How Conditions are Created Express Conditions -- No special language is necessary to create the condition, but it must be stated clearly somehow. Implied Conditions – The condition is not stated, but is clear from the agreement.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Condition Precedent Must occur before a duty arises.  Condition Subsequent Must occur after the particular duty arises.  Concurrent Conditions Certain things must occur simultaneously.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Strict Performance Performance that is exactly what promised; is usually not expected and failure to do so does not cause for discharge.  Substantial Performance A party that substantially performs its obligations will receive the full contract price, minus the value of any defects. A party that fails to perform substantially receives nothing on the contract and will only recover the value of the work, if any.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A personal satisfaction contract is one which the promisee makes a personal, subjective evaluation of the promisor’s performance. A court uses a subjective standard only if assessing the work involves feelings, taste, or judgment and the contract explicitly demands personal satisfaction. In all other cases, a court applies an objective standard to the decision.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  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.”

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A time of the essence clause will generally make contract dates strictly enforceable.  Merely including a date for performance does not make time of the essence.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Material Breach Generally courts will discharge only if a party committed a material breach.  Anticipatory Breach Anticipatory breach is committed by one party making it unmistakably clear that he will not honor the contract.  Statute of Limitations Will limit the time within which the injured party may file suit.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  True Impossibility Something has happened making it utterly impossible to fulfill the promise.  Commercial Impracticability Some event has occurred that neither party anticipated, making the contract extra- ordinarily difficult and unfair to one party.  Frustration of Purpose Some event has occurred that neither party anticipated and the contract now has no value for one party.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.