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What is an absolute promise?
promise without condition
"I will give you my phone"
What is a conditional promise?
promise with condition
"I will give you my phone when you're done with your homework"
What are the 5 types of discharge of a contract?
- - condition
- - performance
- - breach
- - agreement of the parties
- - operation of law
What is a conditional contract?
contract is based on a condition
conditions precedent -- event must occur before performance is due (perform once sth happens)
conditions subsequent -- event terminates a duty to perform (perform until sth happens)
What is discharge by condition?
contractual condition was met/not met
What is discharge by performance?
all parties perform according to the contract
What is a breach of contract?
wrongful failure to perform according to contract
What are the 2 types of breach of contract?
material breach -- essential duty has not been performed
minor breach -- minor part of the contract has not been performed
What determines whether a breach is material?
What are the consequences in case of a breach of contract?
material breach -- NBP is discharged from any further duty under the contract and can recover damages
minor breach -- NBP can recover damages, but is not discharged
What is substantial performance?
incomplete performance that does not defeat purpose of contract
What are the 2 kinds of discharge by agreement of the parties?
mutual rescission -- both agree to terminate original contract
substituted contract -- new contract that replaces the original
What are the 2 kinds of a substituted contract?
accord and satisfaction -- substitute a duty in the contract
novation -- substitute a party of a contract
What are the 6 kinds of discharge by operation of law?
impossibility -- performance cannot be done
commercial impracticability -- performance could be done under unforeseen and unjust hardship
destruction of subject matter -- contract subject does not longer exist
subsequent illegality -- contract objective becomes illegal
bankruptcy -- discharge by court order
statute of limitations -- too much time has passed
What are the 2 kinds of impossibility to perform according to a contract and their effects on the contract?
- subjective impossibility
- -- promisor cannot perform
- => no discharge
- objective impossibility
- -- no one could perform duty
- => discharge