Discharge

Discharge

1. Performance

   • Precise Performance: perform obligations fully and precisely
     • Exceptions
       • De Minimis Rule
       • Divisible Contracts
       • Substantial Performance
         • when promisor substantially performed his obligations, he can claim agreed payment, less the amount necessary to make good the defect.
         • if contract is an entire obligation & payment made conditional upon performance of entire contract, cannot invoke substantial performance.
       • Prevented Performance
       • Acceptance of Partial Performance

2. Breach: when a party fails to perform his obligations under the contract.

   • Actual breach: when time of performance for the obligation has arrived and the promisor fails to perform it.
   • Anticipatory breach: when time of performance has not yet arrived but the promisor has clearly expressed intention not to perform obligation.
   • Repudiation
     • breach of a condition
     • fundamental breach
     • breach of a warranty which entails serious consequences
       • if consequences deprive innocent party of substantially the whole benefit of the contract, innocent party can terminate the contract.
     • Election
       • affirm contract
         • For anticipatory breach: if fustration occurs, innocent party may lose contract. Requires legitimate interests.
       • discharge contract, claim damages

3. Agreement

   • Existing Agreement
   • Subsequent Agreement

4. Fustration

   • supervening event + not parties' fault + radical change in circumstances
   • Destruction of Subject Matter
   • Non-occurence of event
   • Government Interference
   • Personal Incapacity
   • Limiting Factors
     • Foreseeability of fustrating event
     • Force majeure clauses
     • Self-induced fustration
   • Effects
     • future obligations of parties cease
     • money paid prior is recoverable
     • money payable cease to be payable
     • expenses incurred prior can be recovered