BusLaw11.017 - DISCHARGE AND PERFORMANCE Discharge The...

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DISCHARGE AND PERFORMANCE Discharge: The termination of a party’s obligations arising under a contract. Discharge occurs either when: (1) both parties have fully performed their contractual obligations; or (2) events, conduct of the parties, or operation of law release the parties from their obligations to perform. A party’s obligations to perform under a contract may be either absolute or conditioned on the occurrence or nonoccurrence of some event. Ch. 17: Contracts: Performance and Discharge - No. 1 Clarkson et al.’s Business Law (11th ed.)
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CONDITIONAL PERFORMANCE Condition: A contractual qualification, provision, or clause which creates, suspends, or terminates the obligations of one or both parties to the contract, depending on the occurrence or nonoccurrence of some event. Condition Precedent: A condition that must be satisfied before a party’s contractual obligation to perform becomes absolute ( e.g. , Bob promises to hire Terry as a driver as soon as Terry gets his license). Condition Subsequent: A condition the occurrence or nonoccurrence of which will terminate a party’s absolute obligation to perform ( e.g. , Mary agrees to let Sue stay in Mary’s spare room for as long as Sue remains unmarried). Concurrent Conditions: Mutually dependent conditions that must occur or be performed at the same time in order to give rise to any absolute obligation to perform ( e.g. , Nikki offers to pay Tina $100 in exchange for Tina’s class ring). Courts recognize and enforce both express and implied conditions. Ch. 17: Contracts: Performance and Discharge - No. 2 Clarkson et al.’s Business Law (11th ed.)
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CONTRACTUAL PERFORMANCE Discharge by Performance: A contract terminates when both parties perform or tender performance of the acts they have promised. Tender: An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so. Complete vs. Substantial Performance: When a party fails to completely perform her contractual duties, the question arises whether the performance affords the other party substantially the same benefits as those promised . If so, then the first party is said to have substantially performed .
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