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32 terms

Business Law Chapter 17

STUDY
PLAY
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