Contracts II Restatement Sections

A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.

• (1) Performance of a duty subject to a condition cannot become due unless the condition occurs or its non-occurrence is excused.
• (2) Unless it has been excused, the non-occurrence of a condition discharges the duty when the condition can no longer occur.
• (3) Non-occurrence pf a condition is not a breach by a party unless he is under a duty that the condition occur.

An event may be made a condition either by the agreement of the parties or by a term supplied by the court.

• (1) In resolving doubts as to whether an event is ,ade a condition of an obligor's duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee's risk of forfeiture, unless the event is w/in the obligee's control or circumstances indicate that he has assumed the risk.
• (2) Unless the contract is of a type under which only one party generally undertakes duties, when it is doubtful whether
• (a) a duty inimposed on an obligee that an event occur, or
• (b) the event is made a condition of the obligor's duty, or
• (c) the event is made a condition of the obligor's duty and a duty is imposed on the obligee that the event occur,
• the first interpretation is preferred if the event os within the obligee's control.
• (3) In case of doubt, an interpretation under which an event is a condition of an obligor's duty is preferred over an interpretation under which the non-occurrence of the event is a ground for discharge of that duty after it has become a duty to perform.

When it is a condition of an obligor's duty that he be satisfie dwith respect to the obligee's performance or with respect to something else, and it is practicable to determine whether a reasonable person in the position of the obligor would be satisfied, an interpretation os preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied.

To the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange.

Performances are to be exchanged under an exchange of promises if each promise is at least part of the consideration for the other and the performance of each promise is to be exchanged at least in part for the perfromance of the other.

Where the consideration given by each cparty to a contract consists in whole or in part of promises, all the performances to be rendered by each party taken collectively are treated as perfromances to be exchanged under an exchange of promises, unless a contrary intention is clearly manifested.

• (1) Where performances ar eto be exchanged under an exchange of promises, and the whole of one party's performance can be rendered at one time, it is due at one time, unless the language or the circumstances indicate the contrary.
• (2) Where only a part of one party's performance is due at one time under Subsection (1), if the other party's performance can be so apportioned that there is a comparable part that can also be rendered at that time, it is due at that time, unless the language or the circumstances indicate the contrary.

• (1) Where all or part of the performances to be exchanged under an exchange of promises can be so rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary.
• (2) Except to the extent stated in Subsection (1), where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the contrary.

• (1) Full performance of a duty under a contract discharges the duty.
• (2) When performance of a duty under a contract is due any non-performance is a breach.

• (1) A claim for damages for total breach is one for damages based on all of the injured party's remaining rights to performance.
• (2) A claim for damages for partial breach is one for damages based on only part of the injured party's remaining rights to performance.

Except as stated in Rst. 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.

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 preformance that the other party either render or, with manifested present ability to do so, offer perfromance of his part of the simultaneous exchange.

• (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 Rsts. 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.

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.

• In determining whether a failure to render or to offer performance is material, the following circumstances are significant:
• (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
• (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
• (c) the extent to which the party failing to perform or to offer to perform will suffer forfeirture;
• (d) the likelihood that the party failing to performa or offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
• (e) the extent to which the behavior of the party failing to perform or to offer performance comports with standards of good faith and fair dealing.

• In determining the time after which a party's uncured material failure to render or offer performance discharges the other party's remainign duties to render performance under the rules state in Rsts. 237 and 238, the following circumstances are significant:
• (a) those stated in Rst. 241;
• (b) the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements;
• (c) 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 date 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.

• (1) With respect to performances to be exchanged under an exchange of promises, a breach by non-performance gives rise to a claim for damages for total breach only if it discharges the injured party's remaining duties to render such performance, other than a duty to render an agreed equivalent under Rst. 240.
• (2) Except as stated in Subsection (3), a breach by non-performance accompanied or followed by a repudiation gives rise to claim for damages for total breach.
• (3) Where at the time of the breach the only remaining duties of performance are those of the party in breach and are for payment of money in installments not related to one another, his breach by non-performance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total breach.
• (4) In any case other than those stated in the preceding subsections, a breach by non-performance gives rise to a claim for total breach only if it so substantially impairs the value of the contract to the injured party at the time of the breach that it is just in the circumstances to allow him to recover damages based on all his remaining rights to performance.

A party's duty to pay damages for total breach by non-performance 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.

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.

• A repudiation is
• (a) 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 Rst. 243, or
• (b) a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach.

• (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 a total breach under Rst. 243, the obligee may demand adequagte assurance of due performance and may, if reasonable, suspend any performance for which he has not already received and 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.

• (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 Rst. 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.

• (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 exchnaged 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.

• (1) A party's duty to pay damages for total breach by repudition 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 he repudiated would have been discharged by impracticability or frustration before any breach by non-performance.

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

• (1) The effect of a statement as constituting a repudiation under Rst. 250 or the basis for a repudiation under Rst. 251 is nullified by a retraction of the statement if notification of the retraction comes to the attention of the injured party before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.
• (2) The effect of events other than a statement as constituting a repudiation under Rst. 250 or the basis for a repudiation under Rst. 251 is nullified if, to the knowledge of the injured party, those events have ceased to exist before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.

The injured party does not change the effect of a repudiation by urging the repudiator to perform in spite of his repudiation or to retract his repudiation.

• Judicial remedies under the rules stated in this Restatment serve to protect one or more of the following interests of a promisee:
• (a) his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he woudl have been in had the contract been performed,
• (b) his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been had the contract not been made, or
• (c) his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party.

• The judiacial remedies available for the protection of the interests stated in Rst. 344 include a judgement or order
• (a) awarding a sum of money due under the contract or as damages,
• (b) requiring specific performance of a contract or enjoining its non-performance,
• (c) requiring resoration of a specific thing to prevent unjust enrichment,
• (d) awarding a sum of money to prevent unjust enrichment,
• (e) declaring the rights of the parties, and
• (f) enforcing an arbitration award.

• (1) The injured party has a right to damages for any breach by a party against whom the contract is enforceable unless the claim for damages has been suspended or discharged.
• (2) If the breach caused no loss or if the amount of the loss is not proved under the rules stated in this chapter, a small sum fixed without regard to the amount of loss will be awarded as nominal damages.

• Subject to the limitations stated in Rsts. 350-53, the injured party has a right to damages based on his expectation interest as measured by
• (a) the loss in the value to him of the other party's performance caused by its failure or deficiency, plus
• (b) any other loss, including incidental and consequential loss, caused by the breach, less
• (c) any cost or other loss that he has avoided by not having to perform.

• (1) If a breach delays the use of property and the loss in value to the injured party is not proved with reasonable certainty, he may recover damages based on the rental value of the property or on interest on the value of the property.
• (2) If a breach results in defective or unfinished construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on
• (a) the diminution in the market price of the property caused by the breach, or
• (b) the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to him.
• (3) If a breach is of a promise conditioned on a fortuitous event and it is uncertain whether the event would have occurred had there been no breach, the injured party may recover damages based on the value of the conditional right at the time of the breach.

As an alternative to the measure of damages stated in Rst. 347, the injured party has a right to damages based on his reliance interest, including expenditures made in preperation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.

• (1) Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation.
• (2) The injured party is not precluded from recovery by the rule stated in Subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss.

• (1) Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made.
• (2) Loss may be foreseeable as a probable result of a breach because it follows from the breach
• (a) in the ordinary course of events, or
• (b) as a result of special circumstances, beyond the ordinary course of events, that the party in breach had reason to know.
• (3) A court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance, or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation.

Damages are not to be recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty.