Contracts: Excuse of Performance Based on Later Events: Other party's breach

(Does non-performing-party have an excuse that the law will recognize?)

• The other party’s breach may provide an excuse for non-performance

• Sale of goods: If tender is not perfect, the buyer can accept all the goods, reject all of the goods, or accept any commercial units and reject the rest. Whichever option to buyer chooses, she can still get damages from the seller.

• Common law contracts: damages are available for any breach of contract, but only a material breach excuses the injured party from having to perform.

• I hire Martha to decorate my house. She finishes, except for 1 bathroom. What are my rights against Martha? Martha breached the contract, so I can get damages from her, but I am not excused from paying her the contract price. Martha substantially performed.

• What if Martha quit after she decorates only the foyer? It’s a material breach. I not only get damages, I am excused from paying the contract price. HOWEVER, Martha can still recover in quasi-contract for the reasonable value of the benefit conferred.

• Martha contracts to decorate 10 identical cabanas for $90,000. She decorates 3 cabanas, then quits. Can Martha recover under the contract for painting the 3 cabanas? No. 3 out of 10 is a material breach. She can’t recover on the contract, but she can still recover in quasi-contract for the reasonable value of the benefit conferred.

• What if the contract proves for payment of $9,000 per cabana instead of $90,000 for all 10? It’s a divisible contract because payment is on a per unit basis. We do substantial performance on a per-unit basis, too. Martha gets 3x9,000 (the contract price for the 3 cabanas she decorated). Here, her compensation is expressly stated in the contract on a per unit basis.