Contracts: Excuse of Performance Based on Later Events: Failure of an express condition
- Failure of an express condition will excuse non-performance.
- Express condition: contract language that does not create an obligation, but limits obligations created by other contract language (“if” “so long as” “when” “provided” “on the condition that” “unless”). Strict compliance required.
- Satisfaction clauses: apply a reasonable person standard unless the contract deals with art or matters of personal taste, aesthetics.
- Conditions precedent/concurrent/subsequent: a matter of timing.
- If it rains on 7/2 – condition precedent (something happens before)
- As long as Derek keeps the clubs in good repair – condition concurrent (runs along side performance)
- Until the Mets win the World Series– condition subsequent
- BAR TIP: On the bar exam, you are most likely to encounter a condition precedent.
- Occurrence of a condition may be excused by the later action (or inaction) of the person who is protected by the condition.
- Failure to cooperate may excuse the occurrence of a condition
- B agrees to buy S’s house for $300,000 provided that B gets a $200,000 mortgage at 5% or less. B makes no effort to get a mortgage. B refuses to buy the house. When S sues B for breach of contract, B asserts that the condition wasn’t satisfied: he didn’t get a mortgage. Who wins? The SELLER. The buyer is protected by the condition, and he said or did something to acquire the condition. But he failed to look for a mortgage. The buyer loses the protection of the condition and has to go through with the deal.
- Waiver may excuse the occurrence of a condition
- Owner’s duty to make monthly payments is conditioned on Builder’s providing an architect’s certificate for the work. Owner tells Builder he will pay without a certificate. The next month, Builder does not provide a certificate. Owner refuses to pay. BUT the owner has to pay. The owner was protected by the condition—and he gave up – or waived that protection. The builder relied on O’s statement, therefore O loses the protection of the condition.