Week 6  Performance  Remedies

Discharge  Discharge means to “release”  Failure to perform obligation set forth in a contract is not a breach if performance has been discharged.

Types of Discharge  Discharge due to unmet conditions  Discharge by agreement  Discharge by operation of law  Impossibility  Breach as excusing performance

Substantial Performance  Courts usually look at the following: Whether the contract is divisible Whether the unfulfilled promise was dependent on some performance by the other party Whether the end product can be used for its intended purpose The benefit received by the non-breaching party The degree of hardship to the breaching party Whether money damages can be used to compensate for defects Whether the party whose performance was imperfect acted in good faith The consequences of any delay

Perfect Tender under the UCC  Under the perfect tender rule, a buyer has a reasonable time to reject goods that fail, in any respect, to conform to the contract.  This rule seems harsh when compared to the common law doctrine of substantial performance, but the Code does include provisions to lessen the impact.

Alternative Dispute Resolution  To settle a dispute other than by litigation, including arbitration and mediation

Litigation  If the parties do have the right to go to court, it is common for the contract to include a statement about where the matter will be litigated and which state’s law will apply.

Legal Remedy  Award of money; also called damages  In awarding a remedy in a case based on breach of contract, the court can look at three concerns The parties’ expectations What the parties did in reliance on the contract What should be restored to the parties

Types of Damages  Compensatory damages  Expectation damages  Incidental damages  Consequential damages  Special damages  Reliance damages  Liquidated damages  Punitive damages  Nominal damages

Equitable Remedies  Courts have discretion with respect to equitable remedies  They will not enter orders mandating specified actions is an award of damages would adequately compensate the third party  Courts also avoid equitable remedies if parties outside the contract would have to be involved, if the injured party has delayed in a way that is unfair to the other party, if the remedy would cause unreasonable hardship, if the terms of the contract are unclear, or if the contract involves unfairness