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Business Law Chapter 17
Word Definitions
26
Business
10/22/2007

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Term
Subjective Impossibility
Definition
the promisor—but not all promisors—cannot perform; does not discharge the promisor
Term
Objective Impossibility
Definition
no promisor is able to perform; generally discharges the promisor
Term
Destruction of Subject Matter
Definition
will discharge contract if it occurs without the promisor’s fault
Term
Subsequent Illegality
Definition
if performance becomes illegal or impractical as a result of a change in the law, the duty of performance is discharged
Term
Frustration of Purpose
Definition
principal purpose of a contract cannot be fulfilled because of a subsequent event
Term
Commercial Impracticability
Definition
where performance can be accomplished only under unforeseen and unjust hardship, the contract is discharged under the Code and the Restatement
Term
Concurrent Conditions
Definition
conditions that are to take place at the same time.  The law assumes that respective performances under a contract are concurrent conditions, unless there is an agreement to the contrary.
Term
condition subsequent
Definition
A condition subsequent is an event that terminates an existing duty. For example, where goods are sold under terms of sale or return, the buyer has the right to return the goods to the seller within a stated period but is under an immediate duty to pay the price unless she and the seller have agreed upon credit.
Term
Conditions Precedent
Definition
an event that must or must not occur before performance is due
Term
Express Condition
Definition
Explicitly set forth in language.  No particular form of words is necessary to create an express condition, so long as the event to which the performance of the promise is made subject is clearly expressed. The basic rule applied to express conditions is they must be fully and literally performed before the conditional duty to perform arises. "Usually proceded by words such as "provided that", "if", "while", and "upon".
Term
Implied-in-Fact Conditions
Definition
contingency understood by the parties to be part of the agreement, though not expressed
Term
Implied-in-Law Conditions
Definition
contingency not contained in the language of the contract but imposed by law; also called a constructive condition
Term
Breach
Definition
a wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party
Term
Material Breach
Definition
nonperformance that significantly impairs the injured party’s rights under the contract and discharges the injured party from any further duty under the contract
Term

Tender 

Definition
an offer by one party "who is ready, willing, and able to perform" to the other party to perform his obligation according to the terms of the contract.
Term
Novation
Definition
is a substituted contract involving a new third-party promisor or promisee.
Term
Material alteration
Definition
is a material and fraudulent alteration of a written contract by a party to the contract or someone acting on his behalf. It discharges the entire contract.
Term
Mutual rescission
Definition

is an agreement between the parties to terminate their respective duties under the contract. 

Mutual rescission is a discharge by agreement of the parties rather than by operation of law.

Term
Accord
Definition
is a contract by which an obligee promises to accept a stated performance in satisfaction of the obligor's existing contractual duty.
Term
Frustration of purpose
Definition
Where, after a contract is made, a party's principal purpose is substantially frustrated without his fault by the occurrence of an event the nonoccurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the party assumed the risk.
Term
Bankruptcy
Definition
is a discharge of a contractual duty by operation of law available to a debtor who obtains an order of discharge by the bankruptcy court.
Term
objective impossibility
Definition
Historically, the common law excused a party from contractual duties for objective impossibility; that is, where no one could render the performance. The death of a person who has contracted to render personal services is an example of discharge by operation of law due to objective impossibility.
Term
Prevention of performance
Definition
Prevention of performance is one party's substantial interference with performance by the other party.
Term
Perfect Tender Rule
Definition

standard under the UCC that a seller’s performance under a sales contract must strictly comply with contractual duties and that any deviation discharges the injured party

Term
Anticipatory Repudiation
Definition
an inability or refusal to perform, before performance is due, that is treated as a breach, allowing the nonrepudiating party to bring suit immediately
Term
Statute of Limitations
Definition

after the statute of limitations has run, the debt is not discharged, but the creditor cannot maintain an action against the debtor