Leah's KII_Outline - K II Outline A PERFORMANCE AND BREACH...

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K II Outline A. PERFORMANCE AND BREACH a. Promise v. Condition i. Promise - always made by one party. Condition = event only if both parties agree ii. Purpose of promise = to create duty in promisor. Purpose of condition = to postpone a duty in promisor iii. Promise performed = a duty is discharged . Condition occurs = dormant duty activated iv. Promise not performed = breach of K results money damages. Condition fails = duty is dormant & prevented from being perfected. b. Merritt Hill Vineyards Inc. v. Windy Heights Vineyard, Inc.(CB 679) “vineyard case” - sale of vineyard between buyer and seller, where seller failed to meet the condition precedent to come up with the insurance and seller backs out of deal. Ct. said condition failed therefore K failed. c. Other ways to distinguish a promise from a condition: i. “If” - typical of conditions ii. Pure promise = someone has control. iii. Pure condition = neither party has control. d. Ways to describe conditions: i. Promissory conditions – not pure conditions that have promissory elements = some control over the outcome ii. Express conditions – where both parties have agreed implicitly or explicitly. Strict compliance required before performance is due. e. Limitations on Express Conditions - Patterson, Constructive Conditions in K (CB 689) - The Prevention of Forfeitures and Unjust Enrichment i. Constructive Conditions – what court does when faced w/ express condition it doesn’t want to enforce; way for breaching party to recover; ways for breacher to collect (E. Patterson – coined adhesion K ) 1. Forfeiture – “the law abhors a forfeiture (failure or neglect to perform a duty)”, but their enforcement is unpredictable 1. Restatement §229 Excuse of a Condition to Avoid Forfeiture (690) – If non-occurrence of condition causes forfeiture, a court may excuse the condition unless it was a material part of the agreed exchange
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2. Howard v. Federal Crop Insurance Corp.(CB 682) “tobacco farmer case” – farmer had crops destroyed but insurance co. wouldn’t pay claiming farmer failed to meet condition mean to serve as fraud protection, not punish farmer. i. RULE: Where it is doubtful whether words create a promise or an express condition, they are usually interpreted as creating a promise, thereby avoiding forfeiture (684) ii. PUBLIC POLICY: Courts hate forfeiture (683) 2. Unjust Enrichment 3. Material – Says express condition is immaterial 4. Substantial Performance 5. Severability (Divisibility) – Do you have to pay for part you got minus part you didn’t? 6. Doctrine of waiver – party w/ rights has chosen to waive rights 1. Margolin v. Franklin (CB 690) “car payment waiver case” i. When a lender agrees to accept late payments or continues to accept them, it cannot suddenly, without prior warning, hold the party in default for failure to make the payments on the due date.
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