1) What is it?
2) When can it occur? (mnemonic: if you want to claim the defense, you'd better have CRED)
1) DEFINED: Excuses a seller's non-performance where later, unforeseen events make performance impossible or impracticable.
2) OCCURS WHEN
a) increase in COST of seller's performance (MBE: almost never applies. NYBE: look to absolute and percentage increase)
b) government REGULATION makes performance impossible (e.g., supervening law)
c) ESSENTIAL person's death/incapacity
d) DESTRUCTION of something necessary for performance (for ART 2 Ks, destroyed goods must be "identified to the contract"). A seller who bore ROL when goods were damaged or destroyed is excused by impracticability. BUT, if ROL has passed to buyer before goods were damaged/destroyed, seller is off the hook.
FRUSTRATION OF PURPOSE
1) Who can claim?
2) What must be shown?
BUYER can claim frustration of purpose, as a defense to performance
MUST SHOW that seller knew of buyer's purpose for purchase/lease, and that unforeseen events have frustrated achievement of that purpose
FAILURE OF AN EXPRESS CONDITION
1) What is it?
2) How closely must be condition be satisfied?
3) How do you know whether the condition has been "satisfied"? (objective or subjective std?)
4) Can performance still be required?
1) EXCUSES PERFORMANCE of a party if a condition precedent, concurrent, or subsequent is not completely satisfied
2) STRICT COMPLIANCE of the condition is necessary (e.g., almost there isn't good enough)
3) REASONABLE PERSON standard applies, unless K deals with art or matters of personal taste
4) WAIVER OR FAILURE TO COOPERATE can obligate a party to perform, even if the condition is not satisfied. Every condition protects someone. Party can voluntarily waive that protection. Party may retract the waiver for future payments to the extent the other party has not relied on it.