Bmgt380 final study guide Questions With
Verified Answers
What does it mean when contractual obligations are unconditional? - answer✔you have to
perform no matter what
what are the conditions that may attach to performances - answer✔1. condition precedent
2. condition subsequent
3. expressed conditions
4. implied conditions
condition precedent - answer✔-when a future uncertain event creates duty to perform.
-if that future uncertain event does not occur, when their duty to perform does not arise
-ex: "I promise to give you my umbrella if it rains tomorrow"
condition subsequent - answer✔-when a future uncertain event discharges the duty to perform
-ex:· Ex: if I say to my child, "I promise to give you 500 dollars a month. But if you fail out of
college, my duty to pay stops.
(opposite of precedent)
expressed conditions - answer✔-where the contract spells out the condition explicitly. The
conditions HAVE to be met in order to give rise to the duty to perform.
-courts are very strict about requiring compliance-held to strict performance standard
implied conditions - answer✔-not expressly stated in the contract but they are implied given
the facts and circumstances.
ex: If I say " I promise to hep you unpack the uhaul that you will drive to your apartment." It is
obvious and implied that you driving the uhaul to your apartment is an implied condition of my
duty to unpack it. If you do not drive your uhaul to your new apartment, I have no obligation to
help you unpack it.
when can conditions be excused? - answer✔1. if the party benefitted by the condition has
prevented it or hindered it from happening.
2. waiver: when a person voluntarily gives up their right to the condition occurring.
3.estoppel: When you have relied on my waiver/representation that 7 days notice is enough, I
am estopped from asserting the condition
4. impossibility:When performance of the condition becomes impossible
how to determine what level of performance is required by parties - answer✔Parties in a
contract will always be held either to a strict performance standard or a substantial
performance standard
strict performance standard - answer✔-you have to perfectly comply to terms of contract.
There is no room for mistake.
Examples:
-paying certain amount of money -performing by certain deadline -delivering specific goods
substantial performance standard - answer✔-requires less perfrection.
-applies to duties that are somewhat hard to perform without some deviation from perfection
ex:leaf blowing/grass cutting
what is good faith performance (aka implied covenant of good faith and fair dealing) -
answer✔-requires parties to cover out a contract in good faith
-required by law
-broad and flexible
what are the 2 types of breaches? - answer✔1. material
2.nonmaterial
what is a material breach - answer✔-occurs when the applicable performance standard has not
been met.
-If you have a contract where strict performance applies, then a material breach will occur if
that strandard has not been met.
-can occur in strict or substantial contracts
-In the event of a material breach, the injured (nonbreaching party) has the right to withhold
his own performance. He can cancel the contract and can sue for damages of the total breach.
what is a nonmaterial breach? - answer✔-when breach is not serious enough to constitute a
material breach but it is still a breach in some way. In that case, the injured party can only sue
for the damages caused by the breach.
-They cannot cancel the whole contract
-Only applies to substantial performance contracts because any breach of a strict performance
contract would be material
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