Contracts Rules 7
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Condition vs. Promise
Promise: contractual provision purporting to be a statement by the party required to perform.
Condition: statement by the non-performing party, it is a condition.
The failure of a condition relieves a party of the obligation to perform; the failure of a promise constitutes breach.
Constructive conditions of exchange.
Court will imply that builder or employee must perform first (at least “substantially”) before the other side’s performance (the payment of money) becomes due.
Condition precedent vs. condition subsequent
Condition precedent: condition that precedes obligation to perform. Plaitniff has burden of proving condition occurred.
Condition subsequent: condition after which duty to perform is discharged. Defendent has burden of proving that the condition was satisfied.
Condition of satisfactory performance:
Personal aesthetic taste: Not satisfied until individual has determined that the work is satisfactory. Must decline satisfactory status only in GOOD FAITH.
Not involving aesthetic taste: examined against the reasonable person standard.
Substantial performance permitted for:
Constructive conditions. Express conditions and contracts for the sale of goods require full compliance.
Perfect tender rule
The seller must transfer ownership of the goods to the buyer and tender goods conforming to the warranty obligations (conveys good title, has right to transfer, goods delived unencumbered).
Suspension or excuse of a condition where:
- Waiver (but may be retracted if before condition is due and nonwaiving party has not yet relied on waiver)
- Wrongful interference
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