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Condition

an event whose happening or nonhappening affects a duty of performance

Express Condition

contingency explicitly set forth in language

Satisfaction

express condition making performance contingent upon one party's approval of the other's performance

Subjective Satisfaction

approval based upon a party's honestly held opinion

Objective Satisfaction

approval based upon whether a reasonable person would be satisfied

Implied-in-Fact Condition

contingency understood by the parties to be part of the agreement, though not expressed

Implied-in-Law Conditions

contingency not contained in the language of the contract but imposed by law; also called a constructive condition

Concurrent Conditions

conditions that are to take place at the same time

Conditions Precedent

an event that must or must not occur before performance is due

Conditions Subsequent

an event that terminates a duty of performance

Discharge

termination of a contractual duty

Performance

fulfillment of a contractual obligation resulting in a discharge

Breach

a wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party

Material Breach

nonperformance that significantly impairs the injured party's rights under the contract and discharges the injured party from any further duty under the contract

Prevention of Performance

one party's substantial interference with or prevention of performance by the other; constitutes a material breach and discharges the other party to the contract

Perfect Tender Rule

standard under the Uniform Commercial Code that a seller's performance under a sales contract must strictly comply with contractual duties and that any deviation discharges the injured party

Substantial Performance

performance that is incomplete but that does not defeat the purpose of the contract; does not discharge the injured party but entitles him to damages

Anticipatory Repudiation

an inability or refusal to perform, before performance is due, that is treated as a breach, allowing the nonrepudiating party to bring suit immediately

Material Alteration of Written Contract

a material and fraudulent alteration of a written contract by a party to the contract; discharges the entire contract

Mutual Rescission

an agreement between the parties to terminate their respective duties under the contract

Substituted Contract

a new contract accepted by both parties in satisfaction of the parties' duties under the original contract

Accord and Satisfaction

substituted duty under a contract (accord) and the discharge of the prior contractual obligation by performance of the new duty (satisfaction)

Novation

a substituted contract involving a new third-party promisor or promisee

Impossibility

performance of contract cannot be done

Subjective Impossibility

the promisor—but not all promisors—cannot perform;
does not discharge the promisor

Objective Impossibility

no promisor is able to perform; generally discharges the promisor

Destruction of Subject Matter

will discharge contract if it occurs without the
promisor's fault

Subsequent Illegality

if performance becomes illegal or impractical as a result of a
change in the law, the duty of performance is discharged

Frustration of Purpose

principal purpose of a contract cannot be fulfilled because of a subsequent event

Commercial Impracticability

where performance can be accomplished only
under unforeseen and unjust hardship, the contract is discharged under the Code and the Restatement

Bankruptcy

discharge available to a debtor who obtains an order of discharge by the bankruptcy court

Statute of Limitations

after the statute of limitations has run, the debt is not discharged, but the creditor cannot maintain an action against the debtor

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