Term
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Definition
| An event, not certain to occur, which must occur, unless its nonoccurrence is excused, before performance under a contract becomes due. |
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Term
| What is an express condition? |
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Definition
| A condition that is clearly set forth in the parties' agreement (whether the agreement is oral or written). |
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Term
| What is an implied-in-fact condition? |
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Definition
| A condition inferred from the parties' conduct and words. |
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Term
| What is a condition precedent? |
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Definition
| An event that must occur before the other party's duty can mature. |
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Term
| What are concurrent conditions? |
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Definition
| Conditions that are to occur at the same time. |
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Term
| What is a condition subsequent? |
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Definition
| An event occuring after a party's performance is due that the parties agree will discharge the party's liability for nonperformance. |
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Term
| What is the only important distinction between conditions precedent, concurrent conditions, and conditions subsequent? |
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Definition
| Which party has the burden of proof. The party suing for breach of contract has the burden of proving the occurrence of any conditions precedent or concurrent to the other party's duty to perform, whereas the breaching party has the duty of proving the occurrence of a condition subsequent that would discharge its liability for breach. |
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Term
| True or false: An express or implied-in-fact condition need only substantially occur? |
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Definition
| False. An express or implied-in-fact condition must be exactly fulfilled. |
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Term
| How do courts determine whether an event is an express condition or simply a promise? |
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Definition
| Courts use the objective theory of contract interpretation. When, however, it is unclear whether a particular event is an express condition or a promise, it will generally be construed as providing for a promise, not an express condition, so as to avoid forfeiture. |
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Term
| True or false: To avoid forfeiture, express conditions are strictly (i.e., narrowly) construed. |
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Definition
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Term
| What is a promissory condition? |
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Definition
| A condition that is also a promise. |
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Term
| Whether a party is entitled to obtain restitution under a quasi-contract theory when there has been the nonoccurrence of an express condition depends on what? |
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Definition
| Whether the contract is interpreted as permitting such a recovery. |
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Term
| When a condition to a party's performance is the satisfaction of a third party with respect to the other party's performance or something else, the satisfaction clause will be interpreted under what standard? |
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Definition
| Subjective standard, unless the contract provides otherwise. |
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Term
| When a condition to a party's performance is the satisfacton of that party with respect to the other party's performance or something else, the satisfaction clause will be construed under what standard? |
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Definition
| An objective standard, unless (1) the contract clearly provides otherwise; or (2) the performance or event requiring satisfaction involves fancy, taste, sensibility, or judgment, as opposed to operative fitness, utility, or marketability, in which case it will be construed under a subjective standard. |
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Term
| What is a condition of satisfaction? |
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Definition
| A contract provision stating that a party need not perform unless the party or a specified third party is satisfied with the other party's peformance or something else. Also called a satisfaction clause. |
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Term
| True or false: A condition of satisfaction, when the subjective standard applies, renders the agreement illusory and the agreement therefore lacks consideration. |
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Definition
| False. The party is required to perform if honestly satisfied. Thus, there is a commitment, even if not much of a commitment. Remember the peppercorn theory of consideration. |
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Term
| True or false: Courts are becoming less inclined to infer implied-in-fact conditions. |
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Definition
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Term
| Every contract has an implied-in-fact satisfaction clause, which is interpreted according to a subjective standard. |
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Definition
| False. It would be unusual to infer a satisfaction clause, particularly according to a subjective standard. |
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