Contracts_II_Outline_2

Contracts_II_Outline_2 - 1CONTRACTS II OUTLINE I....

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1CONTRACTS II OUTLINE I. CONDITIONS A. Obligation to perform in good faith. i. UCC 1-203 states that every contract or duty within this act imposes an obligation of good faith in its performance or enforcement. ii. This is solidified in restatement 205, which imposes a duty to perform in good faith and fair dealing in the performance and enforcement of contracts. B. Express Conditions i. An event or state of the world that must occur or fail, before a party has a duty to perform ii. An event or state of the world occurance or non occurance which releases a party from its duty to perform. iii. An express condition is one that can be shown to be an explicitly contractual provision. This is placed in the contract by the parties, as a part of the contract. iv. Nonfulfillment of a condition does not give rise to liability for breach of contract. v. Breach of a promise by one party does not always relieve the other party from performing its duties under a contract vi. Interpretation of a provision as a condition or promise 1. The parties intent and words used is the best way to determine this 2. In the case of ambiguity it must be asked if the state of affairs in the contract were to be a. A state of affairs that one party undertakes to bring about so that the provision is a promise or b. A state of affairs that must exist before some other provision that are clearly promises give rise to a duty of performance, so that the provision is a promise 3. Where parties intent is unclear a. The words used can be a big help, such as provided, if and when. b. In the case of doubt interpret provisions as promises i. This is to minimize the risk of forfeiture, and to give the party whose duty is not subject to a provision, and who has relied on the promise some sort of claim. ii. Basically a reduction in forfeiture is what the courts prefer. 4. Implication of a promise from a condition
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a. Sometimes a condition will imply a promise to the party whose duty is under the condition to act in good faith. i. Ex. I will buy the land if I can get a loan, implies a good faith effort to get the loan. 5. Provisions both promise and express condition a. Sometimes one parties promise will act as the condition to the other parties promise. b. I will pay you once I receive the goods from you, means that the promise to deliver the goods, is a condition to the payment by the other party. 6. Conditions Precedent and Subsequent a. A condition which must occur before the party has a duty to perform, burden of proof is on the plaintiff. b. A condition, which if occurs or does not occur, will relive the party from rendering there performance. Burden of proof is on the defendant. 7. Conditions of Satisfaction a. Modern trend is to construe a provision of satisfaction according to the subject matter of the contract. b.
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Contracts_II_Outline_2 - 1CONTRACTS II OUTLINE I....

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