Class 36, Thursday, April 20

4/20/2006 Class 36 5
Justifications for nonperformance
• • • • A sues B K A asserts that B breached a duty owed under K If K existed, and B owed this duty, and B did not do the duty, B will be liable unless B was justified in not performing because of ____________
• • • • 2-209(2) 2-209(3) 2-209(4) 2-209(5)
– no waiver clause
4/20/2006 Class 36 3
Problem 8-3
• sale of goods? • changed circumstances excusing Waller Bros. from having to perform • Modification
4/20/2006
Class 36
18
cost to remedy v. difference or diminution in value
• Which is the standard remedy in construction cases where there has not been full performance? • Does Cardozo apply the standard remedy?
4/20/2006 Class 36 15
• A has a duty to mow
– this duty is a constructive condition of B’s obligation to pay – in other words, B’s duty to pay under the K doesn’t come due until A has fully performed – without the substantial performance doctrine, this could have harsh results
4/20/2006 Class 36 12
substantial performance
• bottom of 746-747 • “We must weigh the purpose to be served, the desire to be gratified, the excuse for deviation from the letter, the cruelty of enforced adherence. . . . The willful transgressor must accept the penalty of his transgression.” • Is this an elements or factors analysis?
4/20/200, p. 703
• accord and satisfaction • “payment in full” check • point of emphasis—amount in question must be unliquidated for a payment in full check to be effective
4/20/2006
Class 36
19
• Why not? • What test does Cardozo come up with?
4/20/2006 Class 36 9
K duties
• J & Y’s duties
– build country residence to specifications – “All wrought iron pipe must be well galvanized, lap welded pipe of the grade known as ‘standardpipe’ of Reading manufacture.”
4/20/2006
Class 36
7
Jacob & Youngs, Inc. v. Kent
New York Court of Appeals 230 N.Y. 239, 129 N.E. 889 (1921)
4/20/2006
Class 36
8
• Who is suing whom? For what kind of damages? What is the legal basis for the claim? • What duty does the plaintiff claim that defendant has breached? • On what basis does the defendant justify his failure to pay the balance?
4/20/2006
Class 36
6
Typical Executory K
prelim. executory negotiations period breach -----------------|-------------------------|--------------|------- t K formation performance due (1) mutual assent (2) consideration
– – – – UCC 2-209(1); good faith Restatement 73 & 89(a) and (c) Duress no-oral-modification clause
• UCC 2-209(2), (4), (5) • common law—generally ineffective
4/20/2006
Class 36
1
Today is a good day to cover a lot of material.
4/20/2006
Class 36
2
Brookside Farms v. Mama Rizzo’s
• NOM clause
– common law approach – UCC approach
4/20/2006
• B has a duty to pay
Class 36
16
• A has a duty to use Reading Pipe
– this duty is a constructive condition of B’s obligation to pay – in other words, B’s duty to pay under the K doesn’t come due until A has fully performed – without the substantial performance doctrine, this could have harsh results
Class 36, Thursday, April 20
Announcements F 779-804; handout on conditions Today’s agenda No Oral Modification Clauses Brookside Farms v. Mama Rizzo’s Problem 8-3 Consequences of nonperformance Material breach Jacob & Youngs, Inc. v. Kent Sackett v. Spindler Anticipatory Repudiation Truman L. Flatt & Sons Co. v. Schupf Hornell Brewing Co. v. Spry
4/20/2006 Class 36
• Kent’s duties
– make progress payments – make final payment
• subject to express condition of Architect’s final certificate
10
• Are duties in a K independent? dependent? • What’s the difference between the two?
4/20/2006
Class 36
11
• Cardozo, p. 746, middle • “From the conclusion that promises may not be treated as dependent to the extent of their uttermost minutiae without a sacrifice of justice, the progress is a short one to the conclusion that they may not be so treated without a perversion of intention. Intention not otherwise revealed may be presumed to hold in contemplation the reasonable and probable. If something else is in view, it must not be left to implication.”
4/20/2006 Class 36 14
• What does the doctrine of substantial performance achieve? • lawnmower hypo—A promises to mow B’s lawn; B promises to pay $10. A mows the lawn but misses a small portion of it. May B assert A’s failure to provide full performance to excuse B from her performance obligation (paying $10)?