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Contracts, Fall 2008

Contracts, Fall 2008. Class 27. Justifications for Non-performance. Enforceability of Modifications Duress and undue influence issues Statute of frauds issues Other Party’s Actions; Conditions Other party’s material breach Other party’s anticipatory repudiation

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Contracts, Fall 2008

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  1. Contracts, Fall 2008 Class 27

  2. Justifications for Non-performance • Enforceability of Modifications • Duress and undue influence issues • Statute of frauds issues • Other Party’s Actions; Conditions • Other party’s material breach • Other party’s anticipatory repudiation • Other party’s giving cause for reasonable grounds for insecurity • Express conditions not met

  3. Modifications • Duress and Undue influence • Modification not enforceable if made under duress or if undue influence present • In any event, there is no consideration: pre-existing duty • Pre-existing duty rule: no modification without consideration

  4. Modern trend • UCC Article 2: no consideration required. UCC Sec. 2-209(1) • Trend even in common law, esp. for unforeseen circumstances or ‘mutual rescission’ • Some courts: good faith is enough • Obviously ‘fake’ consideration won’t suffice

  5. Modifications • Statute of frauds may bar enforcement • Public statute of frauds • Some courts: if contract is within statute, so is modification • Exceptions apply too • Private statute of frauds (agreement by parties in their contract)

  6. Modifications • Can you orally waive a no-oral-modification clause? • Most courts: yes. • UCC approach: 2-209. Oral waiver ok; oral modification not

  7. When does party A’s behavior (non-performance or anticipatory repudiation) serve to excuse B’s performance? • Total breach by party A means B needn’t perform • Less than total breach • If breach is material B can suspend performance • If A has substantially performed, B can only get damages • B ‘anticipatorily repudiates’ • A excused from performing, unless B effectively retracts • B gives A reasonable grounds for insecurity • A can request reasonable assurances and, if doesn’t receive, suspend performance

  8. Vocabulary • Condition • Express • Generally, must be completely satisfied • Implied/constructive • Substantial performance suffices • (as vs. Promise/covenant)

  9. Vocabulary • Representation and warranty • Breach • Total • Material • Partial

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