11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered...
-
Upload
robin-scearce -
Category
Documents
-
view
216 -
download
0
Transcript of 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered...
![Page 1: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/1.jpg)
11
George Mason School of Law
Contracts II
Conditions
This file may be downloaded only by registered students in my class, and may not be shared by them
© F.H. Buckley
![Page 2: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/2.jpg)
Next Day
Warranties PLUS Cure
2
![Page 3: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/3.jpg)
3
Kinds of Terms
Consider: I promise to help you on your journey, the good Lord willin’ and the crick don’t rise.
3
I’m going to drown
![Page 4: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/4.jpg)
4
Kinds of terms
Consider: I promise to help you on your journey provided the crick don’t rise. If the crick rises, am I in breach?
4
![Page 5: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/5.jpg)
5
Kinds of terms
Now consider: I promise to help you on your journey provided the crick don’t rise. So this is not a promise: let’s call it a non-
promissory condition If the event in question occurs, I am excused
from performance
5
![Page 6: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/6.jpg)
6
Kinds of terms
Now consider: I promise the crick won’t rise. If the crick rises, am I in breach?
6
![Page 7: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/7.jpg)
7
Kinds of conditions
Now consider: I promise the crick won’t rise. Is there a problem about promising the
occurrence of an event over which I have no control?
7
![Page 8: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/8.jpg)
8
Kinds of conditions
Now consider: I promise the crick won’t rise. Is there a problem about promising the
occurrence of an event over which I have no control? Ever hear of earthquake insurance?
8
![Page 9: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/9.jpg)
9
Different kinds of terms
Some are obligations, some not
9
Promises
Other terms: definitions,
recitals, non-promissory
conditions, etc.
![Page 10: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/10.jpg)
Express non-promissory conditions: force majeur clauses
A party is not liable for failure to perform the party's obligations if such failure is as a result of Acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (regardless of whether war is declared), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or telephone service.
10
![Page 11: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/11.jpg)
11
When will a court to imply a condition, absent express language?
What kind of gap-filling will the court do?
11
![Page 12: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/12.jpg)
12
When will a court to imply a condition, absent express language?
Paradine v. Jane at 77
12Prince Rupert
![Page 13: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/13.jpg)
13
How willing is a court to imply a condition, in the absence of express language?
Paradine v. Jane at 77 “If a lessee covenant to repair a house,
though it be burnt by lightning, or thrown down by enemies, yet he ought to repair it.”
13
![Page 14: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/14.jpg)
14
How willing is a court to imply a condition, in the absence of express language?
Paradine v. Jane at 77 “If a lessee covenant to repair a house,
though it be burnt by lightning, or thrown down by enemies, yet he ought to repair it.”
But “If a house be destoyed by tempest, or by enemies, the lessee is excused” (?!?)
14
![Page 15: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/15.jpg)
15
How willing is a court to imply a condition, in the absence of express language?
Paradine v. Jane at 77 “If a lessee covenant to repair a house,
though it be burnt by lightning, or thrown down by enemies, yet he ought to repair it.”
But “If a house be destoyed by tempest, or by enemies, the lessee is excused” (?!?)
Does it matter that the leasehold interest had passed?
15
![Page 16: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/16.jpg)
16
Stees p.74
What are the possible legal outcomes here?
16
Third and Minnesota, St Paul
![Page 17: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/17.jpg)
17
Stees
What are the possible legal outcomes here? Builder assumes risk and is liable Owner assumes risk and is liable No one is liable
17
![Page 18: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/18.jpg)
18
Stees
What are the possible legal outcomes here? Builder assumes risk and is liable in
damages for non-completion
18
![Page 19: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/19.jpg)
19
Stees
What are the possible legal outcomes here? Builder assumes risk and is liable in
damages for non-completion If this seems hard, what might the builder do?
19
![Page 20: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/20.jpg)
20
Stees
What are the possible legal outcomes here? Owner assumes risk
And is liable for seller’s damages
20
![Page 21: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/21.jpg)
21
Stees
What are the possible legal outcomes here? Owner assumes risk
Cf. Restatement § 89 (Modification), Illustration 1: By a written contract A agrees to excavate a cellar for B for a stated price. Solid rock is unexpectedly encountered and A so notifies B. A and B then orally agree that A will remove the rock at a unit price which is reasonable but nine times that used in computing the original price, and A completes the job. B is bound to pay the increased amount.
21
![Page 22: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/22.jpg)
22
Stees
What are the possible legal outcomes here? No one is liable
The quicksand puts an end to the contract
22
![Page 23: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/23.jpg)
23
Stees
What are the possible legal outcomes here?
Can you tell which from the language of the contract?
23
![Page 24: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/24.jpg)
24
Stees
What doctrines might a court invoke to put an end to all obligations under the contracts?
24
![Page 25: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/25.jpg)
25
Stees
What doctrines might a court invoke to put an end to all obligations under the contracts? Mistake Frustration/Impracticability Condition
25
![Page 26: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/26.jpg)
26
Stees
Mistake Restatement § 152(1) Where a mistake of both
parties at the time of contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake ….
26
![Page 27: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/27.jpg)
27
Stees
Mistake No mistake if Assumption of risk Restatement § 154 A party bears the risk of mistake when
the risk is allocated to him by agreement of the parties, or he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.
27
![Page 28: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/28.jpg)
28
Stees
Frustration or Impracticability Restatement § 261 Where, after a contract is
made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.
28
![Page 29: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/29.jpg)
29
Stees
(Non-promissory) Condition Restatement § 224 A condition is an event, not
certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.
29
![Page 30: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/30.jpg)
30
Stees
(Non-promissory) Condition Restatement § 224 A condition is an event, not
certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.
Restatement § 225(3) Non-occurrence of a condition is not a breach by a party unless he is under a duty that the condition occur
30
![Page 31: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/31.jpg)
31
Stees
What did the court decide?
31
![Page 32: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/32.jpg)
32
Stees
What did the court decide? The contractor must perform his
engagement, unless prevented by the act of God, the law, or the other party
A presumption against non-promissory conditions that excuse performance
32
![Page 33: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/33.jpg)
33
Stees
What did the court decide? He must perform his engagement, unless
prevented by the act of God, the law, or the other party
If the parties had bargained for an excuse, the courts would honor this. What if we thought we knew how they would have bargained had they put their minds to it?
33
![Page 34: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/34.jpg)
34
Stees
What did the court decide? He must perform his engagement, unless
prevent by the act of God, the law, or the other party
If the parties had bargained for an excuse, the courts would honor this. What if we thought we knew how they would have bargained had they put their minds to it?
And just how do you think they would have bargained?
34
![Page 35: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/35.jpg)
35
Stees
What did the court decide? Quicksand as an informational problem
Who was in the best position to discover or know of the problem?
35
![Page 36: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/36.jpg)
36
Stees
What if one party is contractually bound to perform according to specifications that are defective? U.S. v. Spearin at 78
36
![Page 37: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/37.jpg)
37
Stees
If contractors are liable for breach of promise, what remedies might be available to plaintiff homeowners?
37
![Page 38: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/38.jpg)
38
Stees
If contractors are liable for breach of promise, what remedies might be available to plaintiff-homeowners? Damages for breach (give plaintiff the
benefit of the bargain less the contract price)
38
![Page 39: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/39.jpg)
39
Stees
If contractors are liable for breach of promise, what remedies might be available to plaintiff-homeowners? Damages for breach (give plaintiff the
benefit of the bargain less the contract price)
Set aside (rescind) the contract (absolve plaintiff from paying the price)
39
![Page 40: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/40.jpg)
40
Stees
Set aside the contract (absolve plaintiff from paying the price)
Confusingly, this remedy is available when the promise in question is a condition
40
![Page 41: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/41.jpg)
41
Now it gets confusing
So the term condition can mean two entirely different things That wasn’t very smart, was it?
41
![Page 42: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/42.jpg)
Two kinds of conditions
Non-promissory conditions are not promises and excuse performance by either party on their occurrence
42
![Page 43: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/43.jpg)
Two kinds of conditions
Promissory Conditions are promises (for which the innocent
party may receive consequential damages on breach)
and conditions (which excuse performance by the innocent party)
43
![Page 44: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/44.jpg)
44
Different kinds of conditions
Some are obligations, some not
44
Promissory Conditions
Non-promissory Conditions
![Page 45: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/45.jpg)
Promissory conditions:The example at 615
I agree to sell you my dog for $400, delivery at your house on Thursday.
I come to your house with my dog on Thursday. You tell me you want it but that you can’t pay me till Saturday
Do I have to deliver the dog on Thursday?
45
![Page 46: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/46.jpg)
Promissory conditions
UCC § 2-511(1). Unless otherwise agreed, tender of payment is a condition to the seller's duty to tender and complete any delivery.
46
![Page 47: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/47.jpg)
Promissory conditions
UCC § 2-511(1). Unless otherwise agreed, tender of payment is a condition to the seller's duty to tender and complete any delivery.
This is a promissory condition (i.e., you are in breach if you don’t pay)
47
![Page 48: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/48.jpg)
Promissory conditionsTurn this around
I agree to buy your dog for $400 at your house on Thursday.
I come to your house with $400 on Thursday, but you tell me you won’t give me the dog till Saturday
Do I have to pay you on Thursday?
48
![Page 49: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/49.jpg)
Promissory conditions
UCC § 2-507(1). Tender of delivery is a condition to the buyer's duty to accept the goods
49
![Page 50: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/50.jpg)
What does “condition” mean here?
Not every promise is a promissory condition, but only those promises which must be performed as a condition of the other party’s duty of performance Tender or delivery and payment as
mutual conditions Both parties to stand “ready, willing and
able” to perform
50
![Page 51: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/51.jpg)
Promissory and non-promissory conditions
In what respect do promissory and non-promissory conditions resemble each other?
51
![Page 52: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/52.jpg)
Promissory and non-promissory conditions
In what respect do promissory and non-promissory conditions resemble each other? The non-breaching party is excused from
performance of a promissory condition, and both parties are excused on the occurrence of a non-promissory condition
52
![Page 53: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/53.jpg)
Promissory and non-promissory conditions
In what respect do promissory and non-promissory conditions NOT resemble each other?
53
![Page 54: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/54.jpg)
Promissory and non-promissory conditions
In what respect do promissory and non-promissory conditions NOT resemble each other? The breaching party is liable for damages
on breach of a promissory condition, but not on the occurrence of a non-promissory condition
54
![Page 55: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/55.jpg)
55
What about non-sale of goods
When does a promise amount to a promissory condition?
55
![Page 56: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/56.jpg)
56
What about non-sale of goods
§ 234(1). Order of Performances--Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary.
56
![Page 57: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/57.jpg)
57
What about non-sale of goods
§ 234(1). Order of Performances Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary.
I.e., a presumption of conditions
57
![Page 58: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/58.jpg)
58
What about non-sale of goods
§ 234(2) Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the contrary.
58
![Page 59: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/59.jpg)
59
What about non-sale of goods
§ 234(2) Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the contrary. So he has to do everything before the
other party has to perform
59
![Page 60: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/60.jpg)
60
What about non-sale of goods
§ 234(2) Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the contrary.
“Work before pay”
60
![Page 61: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/61.jpg)
61
Promissory conditions
When I agree to build you a house, when do you have to pay?
61
![Page 62: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/62.jpg)
62
Work before Pay Stewart v. Newbury at 619
What did the contract say about progress payments?
62
![Page 63: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/63.jpg)
63
Work before Pay Stewart v. Newbury at 619
What did the contract say about progress payments? The presumption: If you want progress
payments, you have to bargain for them
63
![Page 64: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/64.jpg)
64
The duty to be ready, willing and ableBell v. Elder at 616
64
![Page 65: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/65.jpg)
65
Bell v. Elder
What were the obligations of the parties as to performance?
Seller to provide the water, power and roads
Buyer to pay a hook-up fee and apply for a building permit
65
![Page 66: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/66.jpg)
66
Bell v. Elder
66
Elders land Bell
The remedy sought: Purchaser Bell sues to recover deposit because Elders failed to supply water
![Page 67: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/67.jpg)
67
Bell v. Elder
Was the buyer acting opportunistically?
67
![Page 68: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/68.jpg)
68
Bell v. Elder
Here there was no order as to when each party should do their work and “work before pay” applied to both parties
Presumption of simultaneous performances
68
![Page 69: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/69.jpg)
69
Divisibility
Can a party in breach of a promissory condition resist forfeiture by asserting that conditions are divisible?
69
![Page 70: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/70.jpg)
70
Divisibility
Suppose that a builder contracts to build seven motels in seven different cities. Separate payment and completion
schedule for each motel. Builder defaults on last motel. Could buyer rescind on all?
70
![Page 71: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/71.jpg)
71
Divisibility
Restatement § 240. If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party’s performance of his part of such a pair has the same effect on the other’s duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.
71
![Page 72: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/72.jpg)
72
Divisibility
Restatement § 240. If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party’s performance of his part of such a pair has the same effect on the other’s duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.
72
![Page 73: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/73.jpg)
73
Divisibility
Same case, but now: All motels built to the same
specifications Builder to be paid $7M for the seven
motels.
73
![Page 74: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/74.jpg)
74
Divisibility
Same case, but now: All motels built to the same
specifications Builder to be paid $7M for the seven
motels
Restatement § 240, illustration 5
74
![Page 75: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/75.jpg)
75
John. v. United Advertising 620
Are highway signs different?
75 Englewood CO
![Page 76: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/76.jpg)
76
John v. United Advertsing
Are highway signs different? Is this like losing your GPS signal at a
crucial point? “Take the first available U-Turn”
76
![Page 77: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/77.jpg)
77
John v. United Advertsing
What are the options for the court?
77
![Page 78: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/78.jpg)
78
John v. United Advertsing
What are the options for the court? Set aside the entire contract Set aside the severable parts of it
78
![Page 79: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/79.jpg)
79
John v. United Advertsing
A “material failure” of the entire contract?
Restatement § 237. Except as stated in § 240, it is a condition of each party’s remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render any such performance due at an earlier time.
Was it that?
79
![Page 80: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/80.jpg)
80
John v. United Advertsing
A “material failure” of the entire contract?
Materiality defined in Restatement 241: will damages suffice? Is cure possible? Unjust forfeiture?
80
![Page 81: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/81.jpg)
81
John v. United Advertsing
A severable contract Sever the breaches and enforce as to the
rest? Suppose the contract had been for a
lump sum payment?
81
![Page 82: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/82.jpg)
82
Divisibility in the UCC
UCC § 2-307 Delivery in Single Lot or Several Lots. Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot. A presumption of non-divisibility
82
![Page 83: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/83.jpg)
83
Divisibility in the UCC
UCC § 2-307 Delivery in Single Lot or Several Lots. Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot. But this might be rebutted if separate
deliveries contemplated
83
![Page 84: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/84.jpg)
84
UCC § 2-612: Installment Contracts
§ 2-612(1) An "installment contract" is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause "each delivery is a separate contract" or its equivalent
84
![Page 85: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/85.jpg)
85
UCC § 2-612: Installment Contracts
§ 2-612(2) The buyer may reject any installment which is non-conforming if the non-conformity substantially impairs the value of that installment and cannot be cured or if the non-conformity is a defect in the required documents
85
![Page 86: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/86.jpg)
86
UCC § 2-612: Installment Contracts
§ 2-612(3) Whenever non-conformity or default with respect to one or more installments substantially impairs the value of the whole contract there is a breach of the whole.
86
![Page 87: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/87.jpg)
87
Promises vs. Conditions
87
Promissory Conditions
Non-promissory Conditions
Bare promises
![Page 88: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/88.jpg)
88
Three different kinds of terms
Non-promissory conditions On its occurrence both parties excused
Promissory conditions On its breach, innocent party may
rescind or sue for damages Bare promises
On its breach, innocent party can sue for damages, but not rescind
88
![Page 89: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/89.jpg)
89
Howard at 625
89
![Page 90: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/90.jpg)
90
Howard
What are the farmer’s remedies if he did not comply with clause 5(b)?
90
![Page 91: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/91.jpg)
91
Howard
What are the farmer’s remedies if he did not comply with clause 5(b)?
Could he be sued for failure to comply with it?
91
![Page 92: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/92.jpg)
92
Howard
What are the farmer’s remedies if he did not comply with clause 5(b)?
Could he be sued for failure to comply with it?
So a non-promissory condition
92
![Page 93: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/93.jpg)
93
Howard
And for non-compliance with Clause 5(f)?
93
![Page 94: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/94.jpg)
94
Howard
Qu. Clause 5(f) If this is not met, Can Howard recover? If this is not met, is Howard liable in
damages?
94
![Page 95: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/95.jpg)
95
Howard
What are the options?
95
![Page 96: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/96.jpg)
96
Howard
What are the options? Bare promise: Not a condition precedent, but a
promise that the event will happen, breach of which gives FCIC a damages remedy at best
Promissory condition: A promise that the event will happen plus non-occurrence excuses the other party from performance
Condition precedent: No promise that event will happen, but non-performance excuses both parties
96
![Page 97: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/97.jpg)
97
Howard
What are the options? Held a Bare promise
97
![Page 98: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/98.jpg)
98
What are the presumptions in the Restatement? Restatement § 227(1) In resolving doubts as to
whether an event is made a condition of an obligor's duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee's risk of forfeiture, unless the event is within the obligee's control or the circumstances indicate that he has assumed the risk.
98
![Page 99: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/99.jpg)
99
What are the presumptions in the Restatement? Restatement § 227(1) In resolving doubts as to
whether an event is made a condition of an obligor's duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee's risk of forfeiture, unless the event is within the obligee's control or the circumstances indicate that he has assumed the risk. So a presumption against promissory and
non-promissory conditions
99
![Page 100: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/100.jpg)
100
What are the presumptions in the Restatement? Restatement § 227(2) Unless the contract is of
a type under which only one party generally undertakes duties, when it is doubtful whether (a) a duty is imposed on an obligee that an event occur, or (b) the event is made a condition of the obligor's duty, or (c) the event is made a condition of the obligor's duty and a duty is imposed on the obligee that the event occur, (a) = bare promise by obligee (b) = non-promissory condition (c) = promissory condition by obligee
100
![Page 101: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/101.jpg)
101
What are the presumptions in the Restatement? Restatement § 227(2) Unless the contract is of
a type under which only one party generally undertakes duties, when it is doubtful whether (a) a duty is imposed on an obligee that an event occur, or (b) the event is made a condition of the obligor's duty, or (c) the event is made a condition of the obligor's duty and a duty is imposed on the obligee that the event occur, the first interpretation is preferred if the event is within the obligee's control. I.e., bare promise
101
![Page 102: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/102.jpg)
102
Recall the different kind of terms in Howard
102
Promissory Conditions
Non-promissory Conditions
Bare promises
![Page 103: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/103.jpg)
103
Non-promissory Conditions
Restatement § 224 A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.
103
![Page 104: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/104.jpg)
104
Promissory Conditions
Restatement § 225(3) Non-occurrence of a condition is not a breach by a party unless he is under a duty that the condition occur
104
![Page 105: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/105.jpg)
105
Promises and ConditionsConditions
Conditions Precedent Promissory No liability if non-occurrence Liability if non-
occurrenceRestatement § 224 Restatement § 225(3)
![Page 106: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/106.jpg)
106
Promises and ConditionsPromises
Conditions Bare Promises(Warranties)
![Page 107: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/107.jpg)
107
Promises and ConditionsPromises
Conditions Warranties Election
Forfeiture Damages Damages only
![Page 108: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/108.jpg)
108
Conditions precedent and subsequent
What’s the difference?
108
![Page 109: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/109.jpg)
Defining Conditions
Conditions precedent: The obligations of the parties will not arise if x has occurred.
Conditions subsequent: The obligations of the parties are suspended if x occurs.
109
![Page 110: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/110.jpg)
110
Conditions precedent and subsequent
Conditions precedent Restatement § 224 A condition is an event,
not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.
110
![Page 111: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/111.jpg)
111
Conditions precedent and subsequent
Conditions subsequent Restatement § 230 “the occurrence of an
event is to terminate an obligor’s duty” Cf. Restatement § 224 cmt e
111
![Page 112: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/112.jpg)
112
Conditions precedent and subsequent
Conditions subsequent Restatement § 230 “the occurrence of an
event is to terminate an obligor’s duty” But not under 230(2) if the obligor is in
breach of duties of good faith and fair dealing or no undue hardship to obligor
112
![Page 113: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/113.jpg)
113
What are the presumptions in the Restatement?
Restatement § 227(3) An interpretation is preferred under which an event is a condition of an obligor’s duty is preferred over an interpretation under which the non-occurrence of the event is a ground for discharge of that duty after it becomes a duty to perform That is, a presumption of a condition
precedent over a condition subsequent
113
![Page 114: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/114.jpg)
114
Conditions precedent and subsequent
Gray v. Gardner at 633
114
![Page 115: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/115.jpg)
115
Conditions precedent and subsequent
Gray v. Gardner Parties bargain for a price by providing
that the contract is void if a greater amount of sperm oil arrive than in the same period of the prior year Buyer to pay a premium if a shortage
115
![Page 116: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/116.jpg)
116
Conditions precedent and subsequent
Gray v. Gardner Parties bargain for a price by providing
that the contract is void if a greater amount of sperm oil arrive than in the same period of the prior year If a condition precedent the contract did not
arise, as the plaintiff must show the condition happened
116
![Page 117: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/117.jpg)
117
Conditions precedent and subsequent
Gray v. Gardner Parties bargain for a price by providing
that the contract is void if a greater amount of sperm oil arrive than in the same period of the prior year If a condition subsequent the contract did
arise, and the onus is on the defendant to show the condition happened
117
![Page 118: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/118.jpg)
118
Conditions precedent and subsequent
Gray v. Gardner Parties bargain for a price by providing
that the contract is void if a greater amount of sperm oil arrive than in the same period of the prior year Held a condition subsequent: onus on
defendant
118
![Page 119: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/119.jpg)
119
Drafting CP and CS clauses
Draft the Gray v. Gardner promise as a CP as a CS
119
![Page 120: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/120.jpg)
120
Attorney-approval clauses at 635
I agree “subject to my lawyer’s approval.” Gaglia v. Kirchner
If a buyer has an attorney approval clause, and the attorney wants changes, can the seller back out?
120
![Page 121: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/121.jpg)
121
Modification, Waiver, Estoppel: Clark v. West at 636
121
The dirty little secret of textbook publishing revealed
![Page 122: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/122.jpg)
122
Modification, Waiver, Estoppel
Distinguish Modifications, waiver, estoppel
122
![Page 123: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/123.jpg)
123
Modification, Waiver, Estoppel
Modifications are bilateral agreements to vary obligations under a contract Promises are modified
123
![Page 124: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/124.jpg)
124
Modification, Waiver, Estoppel
Modifications are bilateral agreements to vary obligations under a contract
Waivers are unilateral acts by one party to excuse another’s performance of an obligation Conditions are waived
124
![Page 125: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/125.jpg)
125
Modification, Waiver, Estoppel
Modifications are bilateral agreements to vary obligations under a contract
Waivers are unilateral acts by one party to excuse another’s performance of an obligation
(Promissory) Estoppel bars a promisor from enforcing a right where he knows that a promisee has detrimentally relied on him.
125
![Page 126: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/126.jpg)
126
Agreement Required?
Reliance required?
Modification
Waiver
Estoppel
Modification, Waiver, Estoppel at common law
![Page 127: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/127.jpg)
127
Agreement Required?
Reliance required?
Modification yes no
Waiver
Estoppel
Modification, Waiver, Estoppel at common law
![Page 128: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/128.jpg)
128
Agreement Required?
Reliance required?
Modification yes no
Waiver no no
Estoppel
Modification, Waiver, Estoppel at common law
![Page 129: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/129.jpg)
129
Agreement Required?
Reliance required?
Modification yes no
Waiver no no
Estoppel no yes
Modification, Waiver, Estoppel at common law
![Page 130: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/130.jpg)
130
Clark v. West
What was the promise? Now you know why textbooks are so
long.
130
![Page 131: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/131.jpg)
131
Clark v. West
What was the promise? Now you know why textbooks are so
long.
Facts alleged on 636 Would this be enough for an estoppel? A waiver?
131
![Page 132: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/132.jpg)
132
(1) An agreement modifying a contract within this Article needs no consideration to be binding.(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.(3) The requirements of the statute of frauds section of this Article (Section 2-201) must be satisfied if the contract as modified is within its provisions.(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.
UCC § 2-209. Modification, Rescission and Waiver
![Page 133: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/133.jpg)
133
Wisconsin Knife Works at 639
What was the contract?
![Page 134: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/134.jpg)
134
Wisconsin Knife Works at 639
What was the contract?
Spade Bits
Metal Crafters
Wisconsin
Black & Decker
Spade bit
Spade bit blank
![Page 135: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/135.jpg)
135
Wisconsin Knife Works
What was the contract? Wisconsin orders 280,000 blanks from
Metal Crafters in Aug-Sept 1981 for delivery in Oct-Nov
New purchase orders in July 1982 Seller not able to deliver until December
1982—13 months late Jan 1983—144,000 blanks produced but
Wisconsin rescinds
135
![Page 136: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/136.jpg)
136
Wisconsin Knife Works
What was the evidence of modification and what are the problems under the UCC?
136
![Page 137: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/137.jpg)
137
2-209(1) An agreement modifying a contract within this Article needs no consideration to be binding.
Posner: Replaced by good faith§ 1-304. Obligation of Good Faith.
Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement.
The UCC: Consideration is out
![Page 138: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/138.jpg)
138
A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
What was the problem with UCC 2-209(2)?
![Page 139: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/139.jpg)
139
Was there a signed modification here?
Why would Wisconsin have wanted a “no modification” clause and why are they standard?
What was the problem with UCC 2-209(2)?
![Page 140: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/140.jpg)
140
A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
Does this refer to the agreement or to the modification?
What does the proviso do?
![Page 141: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/141.jpg)
141
A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
What does this mean?
What does the proviso do?
![Page 142: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/142.jpg)
142
A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
UCC 1-201(37): “Signed” includes any symbol executed or adopted with present intention to adopt or execute a writing
What does the proviso do?
![Page 143: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/143.jpg)
143
A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
I.e., consumer must sign
![Page 144: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/144.jpg)
144
How did Posner decide on modifications?
Posner on modifications
![Page 145: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/145.jpg)
145
How did Posner decide on waiver?
Posner on waiver
![Page 146: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/146.jpg)
146
2-209(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.
Note how this supplements the bias against forfeiture
How did Posner decide on Waiver?
![Page 147: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/147.jpg)
147
Wisconsin Knife Works
When does something which fails as a modification succeed as a waiver in 2-209(4)? “can operate as a waiver”
147
![Page 148: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/148.jpg)
148
Wisconsin Knife Works
Does something which fails as a modification always succeed as a waiver in 2-209(4)?
148
![Page 149: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/149.jpg)
149
Wisconsin Knife Works
When does something which fails as a modification succeed as a waiver in 2-209(4)? Posner: so as not to render 2-209(2)
otiose, let’s add a reliance requirement to 2-209(4)
149
![Page 150: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/150.jpg)
150
Wisconsin Knife Works
When does something which fails as a modification succeed as a waiver in 2-209(4)? Posner: so as not to render 2-209(2)
otiose, let’s add a reliance requirement to 2-209(4)
But is 2-209(5) then otiose?
150
![Page 151: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/151.jpg)
151
Wisconsin Knife Works
But is 2-209(5) then otiose? 2-209(5) A party who has made a waiver
affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.
151
![Page 152: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/152.jpg)
152
Wisconsin Knife Works
How to reconcile the provisions: If there is a no modification clause, the
waiver doesn’t work without reliance If there isn’t a no modification clause,
then no reliance needed, but under 2-209(5), one who waives can’t retract if the other party relies
152
![Page 153: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/153.jpg)
153
Wisconsin Knife Works
Why does Easterbrook dissent?
153
![Page 154: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/154.jpg)
154
Wisconsin Knife Works
Why does Easterbrook dissent? Waiver has never required reliance
154
![Page 155: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/155.jpg)
155
Wisconsin Knife Works
UCC § 1-107. Waiver or Renunciation of Claim or Right After Breach. Any claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party.
155
![Page 156: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/156.jpg)
156
Wisconsin Knife Works
How to reconcile the provisions Waiver in 2-209(4) might encompass
either past or future performance Estoppel in 2-209(5) refers only to future
(executory) performance
156
![Page 157: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/157.jpg)
157
Wisconsin Knife Works
So how would Easterbrook prevent 2-209(2) from being otiose?
157
![Page 158: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/158.jpg)
158
Wisconsin Knife Works
So how would Easterbrook prevent 2-209(2) from being otiose? A stricter standard of proof as to
intention?
158
![Page 159: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/159.jpg)
159
Agreement Required?
Reliance required?
Modification yes no
Waiver no no
Estoppel no yes
Avoiding forfeiture: Common Law
![Page 160: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/160.jpg)
160
Agreement Required?
Reliance required?
Modification no consideration needed 2-209(1)
Good Faith in § 1-304
But no modification clause enforced 2-209(2)
no
Waiver
Estoppel
Avoiding forfeiture: UCC
![Page 161: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/161.jpg)
161
Agreement Required?
Reliance required?
Modification
Waiver No Yes: Posner
No: Easterbrook
Estoppel
Avoiding forfeiture: UCC
![Page 162: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/162.jpg)
162
Agreement Required?
Reliance required?
Modification
Waiver
Estoppel No Executory only 2-209(5)
Avoiding forfeiture: UCC
![Page 163: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/163.jpg)
163
Why no waiver in Suzuki at 646?
163
![Page 164: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/164.jpg)
164
Why no waiver in Suzuki at 657?
Did Suzuki waive Kummer’s failure to order Suzuki parts?
164
![Page 165: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/165.jpg)
165
Why no waiver in Suzuki at 657?
The onus of proof to satisfy 2-209(4) unequivocal and unambiguous actions
needed for a waiver
165
![Page 166: 11 George Mason School of Law Contracts II Conditions This file may be downloaded only by registered students in my class, and may not be shared by them.](https://reader031.fdocuments.us/reader031/viewer/2022012922/56649ca35503460f9496395a/html5/thumbnails/166.jpg)
166
Why no waiver in Suzuki?
Termination clauses and agency costs Wisconsin Fair Dealership Law, 1974
135.03 Cancellation and alteration of dealerships. No grantor, directly or through any officer, agent or employee, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.
166