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MGMT 212
Performance and Discharge (Ch. 17)
25
Management
Undergraduate 2
06/23/2009

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Term
Conditions
Definition
A possible future event the occurrence or non-occurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract.
Term
Types of Conditions
Definition
1.) Condition precedent. 2.) Condition subsequent. 3.) Concurrent conditions. 4.) Express/implied Conditions.
Term
Conditions Precedent
Definition
A condition that must be fulfilled before a party's performance can be required. If the condition precedent doesn't occur, the parties are discharged from their contractual obligations.
Term
Conditions Subsequent
Definition
A condition that operates to terminate a party's absolute promise to perform. The occurrence of the conditioning event extinguishes an existing contractual duty, so that the parties are discharged.
Term
Concurrent Conditions
Definition
The performance of each party is conditioned or dependent upon the simultaneous performance of the other party.
Term
Express/implied Conditions
Definition
An express condition is a condition that is clearly stated and provided for in the contract by the parties. An implied-in-fact condition is one that is not expressed by the parties but is understood or inferred from the contract.
Term
Discharge by Performance
Definition
Full, complete performance in the manner prescribed by the contract discharged the performing party.
Term
Tender of Complete Performance
Definition
An unconditional offer to perform by a party who is ready, willing, and able to do so. The tendering party is discharged if his tender is not accepted. // Once performance has been tendered, the party making the tender has done everything possible to carry out the terms of the contract. If the other party then refuses to perform, the party making the tender can sue for breach of contract.
Term
Complete (strict) Performance
Definition
Complete performance includes strict compliance with any express conditions. Failure to comply with an express condition and render the exact performance may discharge the party receiving the defective performance.
Term
Substantial Performance
Definition
Performance which does not greatly vary from the performance that is promised in the contract but is slightly less than that which reasonably could be expected. If performance is substantial, the other party's duty to perform remains absolute, less damages for the deviation. Good faith is required. // Difference in VALUE is important.
Term
Performance to the Satisfaction of Another
Definition
If personal taste, preferences, aesthetics, fancy, or comfort is involved, it is a "personal" contract. If satisfaction relates to operative fitness, marketability, merchantability, or mechanical utility: ?
Term
Breach of Contract
Definition
Any non-performance of a contractual duty.
Term
A "Material" Breach
Definition
Performance is not at least substantial. // Party who totally fails to perform is not discharged and is liable for damages for breach of contract. The other party, however, is discharged and need not hold himself ready to perform. If there is a minor, non-material breach of contract, the breaching party is liable for damages if the breach isn't cured. The non-breaching party is not discharged and is required to perform.
Term
Anticipatory Repudiation of Contract
Definition
When one party refuses to perform before either party actually has a duty to perform. // If a party repudiates a contract, the other party may sue immediately and is discharged from performance. // Non-breaching party shouldn't be required to remain ready to perform when the other party has refused to perform. Non-breaching party should have an opportunity to seek another similar contract elsewhere.
Term
Time for Performance
Definition
If time for performance isn't stated, performance is to be rendered within a reasonable period of time. If time is of the essence, it should be stated as so in the contract.
Term
Types of Discharge by Agreement (Four Types)
Definition
Mutual rescission, discharge by novation, substituted agreement, discharge by accord and satisfaction.
Term
Mutual Rescission (two types)
Definition
1.) Executory on both sides: neither party performed so, both can be discharged. 2.) Executed on one side: Only rescinded if executed party receives new consideration.
Term
Discharge by Novation
Definition
When parties to a contract BOTH agree with a 3rd party that the contractual rights and duties of one original party will be assumed by that third party. // This is a new contract.
Term
Substituted Agreement
Definition
Settlement: a new agreement that discharges old contract.
Term
Discharge by Accord and Satisfaction
Definition
An accord is an executory contract to perform some act in order to satisfy an existing contractual obligation. Satisfaction is the performance or execution of the accord agreement.
Term
Discharge by Operation of Law (four types)
Definition
1.) alteration of contract. 2.) statutes of limitation. 3.) bankruptcy. 4.) discharge by impossibility or impracticability of performance.
Term
Alteration of the Contract (discharge by operation of law)
Definition
If there is a material alteration of a written contract w/o consent, the party unaware of the change can: 1.) Void that contract. 2.) Perform the first contract. OR 3.) Perform the new (altered) contract.
Term
Statutes of Limitations (discharge by operation of law)
Definition
Once statutes of limitations runs out judicial remedies are barred. (Debt or underlying obligation are NOT extinguished).
Term
Bankruptcy (discharge by operation of law)
Definition
A discharge in bankruptcy operates as a release of a debtor from most debts and contractual obligations. After a decree of discharge in bankruptcy is issued by a bankruptcy court, a partial payment by a debtor will not revive the obligation.
Term
Discharge by Impossibility or Impracticability of Performance (discharge by operation of law)
Definition
Imp of Perf: Subjective = "It's harder for me to do perform." Not an excuse. Objective = The action cannot be done... it is impossible. This discharges parties. (Death, serious illness, incapacitation of a party who is to render personal services; destruction of specific subject matter of contract; change in law making performance illegal. // Comm Impract: When performance is excused b/c of extreme change in circumstances making performance impracticable b/c performance will be extremely more difficult, extremely more burdensome, or extremely more costly to render. // Frustration of purpose = When an unforeseen event frustrates what both parties had in mind. // Temporary Impossibility: When performance is Objectively Impossible only for a while.
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