Week 6
 Performance
 Remedies
Discharge
 Discharge means to “release”
 Failure to perform obligation set forth
in a contract is not a breach if
performance has been discharged.
Types of Discharge
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Discharge due to unmet conditions
Discharge by agreement
Discharge by operation of law
Impossibility
Breach as excusing performance
Substantial Performance
 Courts usually look at the following:
 Whether the contract is divisible
 Whether the unfulfilled promise was dependent on
some performance by the other party
 Whether the end product can be used for its
intended purpose
 The benefit received by the non-breaching party
 The degree of hardship to the breaching party
 Whether money damages can be used to
compensate for defects
 Whether the party whose performance was
imperfect acted in good faith
 The consequences of any delay
Perfect Tender under the UCC
 Under the perfect tender rule, a buyer
has a reasonable time to reject goods
that fail, in any respect, to conform to
the contract.
 This rule seems harsh when
compared to the common law
doctrine of substantial performance,
but the Code does include provisions
to lessen the impact.
Alternative Dispute Resolution
 To settle a dispute other than by
litigation, including arbitration and
mediation
Litigation
 If the parties do have the right to go
to court, it is common for the contract
to include a statement about where
the matter will be litigated and which
state’s law will apply.
Legal Remedy
 Award of money; also called
damages
 In awarding a remedy in a case based
on breach of contract, the court can
look at three concerns
 The parties’ expectations
 What the parties did in reliance on the
contract
 What should be restored to the parties
Types of Damages
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Compensatory damages
Expectation damages
Incidental damages
Consequential damages
Special damages
Reliance damages
Liquidated damages
Punitive damages
Nominal damages
Equitable Remedies
 Courts have discretion with respect to
equitable remedies
 They will not enter orders mandating
specified actions is an award of damages
would adequately compensate the third party
 Courts also avoid equitable remedies if
parties outside the contract would have to be
involved, if the injured party has delayed in a
way that is unfair to the other party, if the
remedy would cause unreasonable hardship,
if the terms of the contract are unclear, or if
the contract involves unfairness