discharge
Chapter 22 Performance and Discharge
Laura Westensee
Edited by Nikki Meltabarger
I. Conditions in Contracts Under Common Law, a contract is an agreement involving a promise or set of promises enforceable by law. The Uniform Commercial Code uses this same definition of contract, but in a more limited sense pertaining to the sale of goods. A person who makes an offer is the offeror, while the person to whom the offer is made is the offeree. The offeree is given the power to create a legally enforceable obligation. Once the contract is formed, the parties to the contract now include promisors--those who make a promise--and promisees--those to whom a promise is made. All contracts are subject to conditions. If the terms of the agreement are conditions, then exact performance may be required. A condition may either be breached or met. When a condition is breached, it is not fulfilled. When a condition is met, it is fulfilled. A condition may also be implied or express. Implied conditions are inferred from the nature of the transaction or the conduct of the parties. Express conditions are explicitly stated and included in the terms of the agreement1. The law recognizes the following three kinds of conditions: precedent, concurrent, and subsequent. A. Precedent If the promises made within a contract are not effective until a certain event takes place, a condition precedent exists. The performance of the contract is reliant on a certain event occurring in the future. A party makes a conditional promise that becomes absolute when the condition is fulfilled. A condition precedent assumes each party has “a duty of immediate performance” once the contract is formed2. The performance of the parties, though, does not take place until some point in the future. Condition precedent commonly exists in building contracts, which contain provisions that the contractor will not receive final payment until an architect has issued a certificate that the building
Laura Westensee
Edited by Nikki Meltabarger
I. Conditions in Contracts Under Common Law, a contract is an agreement involving a promise or set of promises enforceable by law. The Uniform Commercial Code uses this same definition of contract, but in a more limited sense pertaining to the sale of goods. A person who makes an offer is the offeror, while the person to whom the offer is made is the offeree. The offeree is given the power to create a legally enforceable obligation. Once the contract is formed, the parties to the contract now include promisors--those who make a promise--and promisees--those to whom a promise is made. All contracts are subject to conditions. If the terms of the agreement are conditions, then exact performance may be required. A condition may either be breached or met. When a condition is breached, it is not fulfilled. When a condition is met, it is fulfilled. A condition may also be implied or express. Implied conditions are inferred from the nature of the transaction or the conduct of the parties. Express conditions are explicitly stated and included in the terms of the agreement1. The law recognizes the following three kinds of conditions: precedent, concurrent, and subsequent. A. Precedent If the promises made within a contract are not effective until a certain event takes place, a condition precedent exists. The performance of the contract is reliant on a certain event occurring in the future. A party makes a conditional promise that becomes absolute when the condition is fulfilled. A condition precedent assumes each party has “a duty of immediate performance” once the contract is formed2. The performance of the parties, though, does not take place until some point in the future. Condition precedent commonly exists in building contracts, which contain provisions that the contractor will not receive final payment until an architect has issued a certificate that the building