LSB 3213 Lecture 23: Chapter 18 & 19

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Legal Studies in Business
LSB 3213
William Michael Schuster

Chapter 18 & 19 Notes A. Performance a. Rules must be established to determine when one party has fully performed its promise or breached b. When a party has performed, they are discharged from the contract c. Most contracts are absolute promises, though some are conditional B. Conditions a. Condition Precedent i. Has to happened before the duty/obligation can be performed b. Condition Subsequent i. An event happening after making a contract that can terminate one's obligation to perform c. Implied of Expressed Condition i. Assumption of the nature of conduct C. Breach- 2 Kinds of performance a. Perfect Performance i. Complete performance of the contract b. Substantial Performance i. Vast performance of the contract c. Make good on all promises D. Performance to One's Satisfaction a. Determined in good faith b. Issue: subjective or objective standard/test i. Personal Service 1. Painted portrait c. Objective standards i. Mounting of an item/object 1. Heating pump E. Material Breach a. "The nonperformance of a contractual duty" b. Effect: the other party cannot perform and sue you c. A breach is material when the performance is not at least substantial d. When the breach is material, the other party is excused from performing i. Minor breaches require continued performance F. "Time is of the Essence" a. Any late performance is considered Material G. Anticipatory Repudiation a. When a party informs the other they will not perform. This excuses the other of performance. i. Repudiation is always a material breach b. Timing- if no time for performance is set, it should be performed in a reasonable amount of time i. Time is not assumed to be "of the essence" of "vital" unless otherwise stated Chapter 18 & 19 Notes H. Discharge a. The termination of contractual duties before performance is completed b. Can be done by mutual rescission i. Essentially requires a new contract to terminate the old contract c. Cannot mutually rescind if one party completely performed d. Novation i. When both parties agree to substitute a third party for one of the originals e. Discharge by settlement (of a genuine dispute) f. Discharge by accord or satisfaction I. Discharge by Operation of Law a. Statute of Limitations i. Bankruptcy ii. Impossibility- When some unforeseeable event makes performance impossible 1. Impossibility occurs in 3 situations a. When a party to a personal contract dies b. When th
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