USA

237 Effect on Other Party's Duties of a Failure to Render Performance see also Mandatory Obligations

Except as stated in § 240, it is a condition of each party's remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render any such performance due at an earlier time.

238 Effect on Other Party's Duties of a Failure to Offer Performance see also Mandatory Obligations

Where all or part of the performances to be exchanged under an exchange of promises are due simultaneously, it is a condition of each party's duties to render such performance that the other party either render or, with manifested present ability to do so, offer performance of his part of the simultaneous exchange.

239 Effect on Other Party's Duties of a Failure Justified by Non-Occurrence Of a Condition see also Mandatory Obligations

1. A party's failure to render or to offer performance may, except as stated in Subsection (2), affect the other party's duties under the rules stated in §§ 237 and 238 even though failure is justified by the non-occurrence of a condition.

2. The rule stated in Subsection (1) does not apply if the other party assumed the risk that he would have to perform in spite of such a failure.

240 Part Performances as Agreed Equivalents see also Mandatory Obligations

If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party's performance of his part of such a pair has the same effect on the other's duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.

241 Circumstances Significant in Determining Whether a Failure Is Material

In determining whether a failure to render or to offer performance is material, the following circumstances are significant:

  • the extent to which the injured party will be deprived of the benefit which he reasonably expected;
  • the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
  • the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
  • the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
  • the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

242 Circumstances Significant in Determining When Remaining Duties Are Discharged

In determining the time after which a party's uncured material failure to render or to offer performance discharges the other party's remaining duties to render performance under the rules stated in §§ 237 and 238, the following circumstances are significant:

  • those stated in § 241;
  • the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements;
  • the extent to which the agreement provides for performance without delay, but a material failure to perform or to offer to perform on a stated day does not of itself discharge the other party's remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is important.

245 Effect of a Breach by Non-Performance As Excusing the Non-Occurrence Of a Condition see also Mandatory Obligations

Where a party's breach by non-performance contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.

Topic 3 - Effect of Prospective Non-Performance

250 When a Statement or an Act Is a Repudiation

A repudiation is

  • a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under § 243, or
  • a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach.

251 When a Failure to Give Assurance May Be Treated as a Repudiation

1. Where reasonable grounds arise to believe that the obligor will commit a breach by non- performance that would of itself give the obligee a claim for damages for total breach under § 243, the obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he receives such assurance.

2. The obligee may treat as a repudiation the obligor's failure to provide within a reasonable time such assurance of due performance as is adequate in the circumstances of the particular case.

252 Effect of Insolvency

1. Where the obligor's insolvency gives the obligee reasonable grounds to believe that the obligor will commit a breach under the rule stated in § 251, the obligee may suspend any performance for which he has not already received the agreed exchange until he receives assurance in the form of performance itself, an offer of performance, or adequate security.

2. A person is insolvent who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due or is insolvent within the meaning of the federal bankruptcy law.

253 Effect of a Repudiation as a Breach and on Other Party's Duties seee also Remedies

1. Where an obligor repudiates a duty before he has committed a breach by non- performance and before he has received all of the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach.

2. Where performances are to be exchanged under an exchange of promises, one party's repudiation of a duty to render performance discharges the other party's remaining duties to render performance.

254 Effect of Subsequent Events on Duty to Pay Damages see also Remedies

1. A party's duty to pay damages for total breach by repudiation is discharged if it appears after the breach that there would have been a total failure by the injured party to perform his return promise.

2. A party's duty to pay damages for total breach by repudiation is discharged if it appears after the breach that the duty that he repudiated would have been discharged by impracticability or frustration before any breach by non-performance.

255 Effect of a Repudiation as Excusing the Non-Occurrence Of a Condition see also Remedies

Where a party's repudiation contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.

379 Election to Treat Duties of Performance Under Aleatory Contract as Discharged

If a right or duty of the injured party is conditional on an event that is fortuitous or is supposed by the parties to be fortuitous, he cannot treat his remaining duties to render performance as discharged on the ground of the other party's breach by non-performance if he does not manifest to the other party his intention to do so before any adverse change in the situation of the injured party resulting from the occurrence of that event or a material change in the probability of its occurrence.