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Chapter 17: Contracts — Performance and Discharge

Chapter 17: Contracts — Performance and Discharge. Introduction. How does a party know when his or her obligations under the contract are at an end? A party may be discharged from a valid contract by: A condition occurring or not occurring.

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Chapter 17: Contracts — Performance and Discharge

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  1. Chapter 17:Contracts — Performance and Discharge

  2. Introduction • How does a party know when his or her obligations under the contract are at an end? • A party may be discharged from a valid contract by: • A condition occurring or not occurring. • Full performance or material breach by the other party. • Agreement of the parties. • Operation of law.

  3. §1: Conditions • Possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract. • Types of Conditions: • Conditions Precedent. • Conditions Subsequent. • Conditions Concurrent. • Express. • Implied in Fact. • Implied in Law.

  4. §2: Discharge by Performance • The contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised. • Types of Performance: • Complete Performance. • Substantial Performance (minor breach). • Performance to the Satisfaction of One of the Parties or a Third Party. • Case 17.1: Jacobs & Young v. Kent (1921).

  5. Material Breach of Contract Breach of Contract - the nonperformance of a contractual duty. • Material breach occurs when there has been a failure of consideration. Discharges the non breaching party from the contract. • In a Minor breach, the duty to performed is not excused and the non-breaching party must resume performance of the contractual obligations undertaken. • Case 17.2 Van Steenhouse v. Jacor Broadcasting of Colorado, Inc. (1998).

  6. Anticipatory Repudiation • If before performance is due, one party refuses to perform his or her contractual obligation. • Results in material breach. • The nonbreaching party should not be required to remain ready and willing to perform when the other party has repudiated the contract. • The nonbreaching party should have the opportunity to seek a similar contract elsewhere.

  7. §3: Discharge by Agreement • Rescission. • Novation. • Substituted Agreement. • Accord and Satisfaction.

  8. §4: Discharge by Operation of Law • Alteration of a contract. • Statutes of Limitations. • Bankruptcy. • Impossibility of Impracticability of Performance.

  9. Impossibility or Impracticability of Performance • Objective Impossibility of Performance: • Death or incapacitation prior to performance; • Destruction of the Subject Matter; or • Illegality in performance. • Commercial Impracticability. • Frustration of Purpose. • Temporary Impossibility. • Case 17.3: Syrovy v Alpine Resources (1992).

  10. Law on the Web • Summary of how contracts may be discharged. • Law Guru’s contract site. Legal Research Exercises on the Web.

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