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Did the duty to perform arise? If not, the failure to perform is not a breach.
Even if the duty to perform arose, and the defendant didn¶t perform- it may not be a breach
because there are situations where a duty can be discharged.

Unconditional vs. Conditional Duties

RY Unconditional Duties- are absolute, depend on nothing other than the passage of
time (it is not based on any necessary conditions)
RY Conditional Duties- duty depends on something else happening
iY Condition Precedent- a future event, the occurrence of which gives rise to a
duty to perform
èY Failure of condition (defense)-If condition does not occur, the failure
to perform is not a breach
èY - satisfaction
[Y Party¶s satisfaction
RY -bjective test- if subject matter of contract deals with
mechanical fitness, utility, suitability
RY - subjective test- if subject matter of the contract
deals with personal taste, aesthetics, opinion
rd
[Y à Party Satisfaction
RY requirement of good faith
iY Concurrent Conditions
èY Each duty is conditioned on the other party showing up ready and
able to perform
iY Condition Subsequent
èY   future event, the occurrence of which discharges a duty to perform
iY Express vs. Implied
èY Implied in fact, implied in law
Discharge of Contract Duties
RY cy Performance or Tender of performance (showing up ready, willing and able to
perform and offering your performance)
RY cy  greement
iY utual rescission
iY Substituted Contract (explicitly cancels and takes the place of a prior
agreement)
iY üovation
iY Debt Settlement  greement/  ccord & Satisfaction
RY cy -peration of Law
iY Impossibility (-bjective- conditions that would make it impossible for anyone
to perform, not just personal impossibility)
èY Death or incapacity under a personal service contract
èY Subsequent illegality
èY Destruction of the subject matter of the contract, through no fault of
either party (Common Law)
 èY Commercial impracticability
[Y Unforeseeable/extraordinary event/circumstance
[Y  üD renders the performance extremely harsh/difficult
iY Statutes of Limitations
iY cankruptcy
RY cy other party¶s aterial breach
iY üon-material breach does not discharge contract duties
èY Substantial performance under common law
èY ailure to perform on time is a non material breach (if performed
within reasonable time), unless time is of the essence (explicitly or
implicitly)
iY aterial breach does discharge contractual duties ± been deprived of the
essence of the deal
èY ailure to substantially perform under the common law
èY UCC perfect tender rule- any substantive defect (in performance) is a
material breach
èY Substantial interference with or prevention of performance
èY  nticipatory repudiation- one party informs the other party ahead of
time that they wont be performing
èY cad aith- something that would normally be a non material breach
could be considered a material breach if the person acted in very bad
faith

Self Quiz- Chapter 2, due December 1st

Situation where decision maker is faced with an ethically ambiguous situation
Present with two legal options
RY Ex: business now are faced with the decision to use overseas suppliers
RY Pharmaceutical company produces a drug but D  wont approve, company can
legally market and sell the drug in another country
Identify and explain two theories from the chapter in rules of law, in application section- use
-üE of the theories to argue what the company should do