Singer claims isn't the way it was supposed to be and claims that there was implied warranties on the side of Dupont.
Dupont claims that they made explicit warranties and therefore implied warranties won' matter
Ruling: Implied warranties can be attached to the explicit warranties.
Advice: Dupont should have had a disclaimer to any additional warranties
316 Article 2
Office Supply V. Basic Four
Issue: Whether the disclaimer in the contract was conspicuous.
Holding: Although the D disclaimed the implied warranties twice and they were in italicized print, the disclaimers were not conspicuous.
Rationale: An attempted disclaimer written in only slightly contrasting print and without a heading adequate to call the buyer's attention to the disclaimer clause was not effective. The court relied on the ruling in Dorman v. International Harvester. In this case, the two disclaimers in the contract are on the reverse sides of the first two pages of the contract. They are not positioned close to the buyer's signature line. The contracts are printed on pale green paper and the disclaimers are set forth in print which, although italicized, is only slightly contrasting with the remainder of the contract. There are no headings noting the disclaimers of warranty. Since there is only "'some slight contrasting set-off'" and there is "'only a slight contrast with the balance of the instrument, therefore, the disclaimers are not conspicuous.
Issue: Whether the disclaimer of the warranty is valid even thought it was not conspicuous in the contract.
Holding: If a buyer is actually aware of a warranty disclaimer, then the disclaimer is effective even if not conspicuous.
Rationale: P’s testimony establishes that the warranty disclaimers were neither unexpected nor unbargained for, and that, consequently, under Dorman, they should be enforced. The Official Comment to UCC § 2-316 states that the section is designed "to protect a buyer from unexpected and unbargained language of disclaimer.”
The judicial loss that has developed:
Where the buyer knows of the disclaimer.
This semester:
Assume contract has been formed and that it is enforceable. What is it that the parties actually agreed to?
When is a party allowed to walk away or reneg on a promise?
What are situations where a failure to perform does not result in a breach?
Is there a condition?
Definition of a condition (event not certain to occur which must occur before performance is due?
Did the condition occur?
Lutinger V. Rosen
Facts: P contracted to buy D’s property conditional upon him obtaining a mortgage financing in the amount of $45,000 for interest rate not more than 8.5 percent per annum. P promised to use due diligence. P’s attorney handled the financing process and he only knew of one lending institution in the area that would meet P’s requirements. Therefore, he applied for loan at this institution and the loan was offered but was above the 8.5 percent interest level. P refused to accept that loan and asked D for the return of deposit. D offered to fund the interest rate difference but P refused.
Procedure: Lower court ruled in favor of P.
Issue: Did the Plaintiffs exercise due diligence in seeking a mortgage in order to satisfy the condition precedent to performance of the contract?
Holding: Yes. The contract stipulated that the Plaintiffs’ purchase of the Defendants’ premises was conditioned upon the Plaintiffs’ ability to procure financing in the amount of $45,000 for a term of at least twenty years and at an interest rate of less than 8.5%. The Plaintiffs’ attorney sought financing at the only lending institution in and around the area that might satisfy the condition precedent, but was unable to secure the mortgage at the desired rate. His failure to look elsewhere does not constitute a lack of due diligence. He was knowledgeable about lending practices in the area. Therefore, seeking another lender would have been a futile act and the law imposes no duty to undertake a futile act. Hence, since the condition precedent was not met, the contract is not binding and the plaintiffs are entitled to a refund of their deposit.
Rationale: Under the K, P used due diligence. P didn’t have to apply to lending institutions where he knew that his loan was not going to get approved. “The law does not require the performance of a futile act.” Furthermore, the K clearly stated the condition upon which the parties promised to purchase. If this condition wasn’t met, P had no obligation to buy D’s property and was entitled to his deposit. The fact that D made an additional offer to fund the interest rate difference does not change the original . P had no obligation to accept D’s offer. Affirmed.
Discussion: A condition precedent to performance must be met before performance is required on a contract.
If contract did not say expressly that buyer did not say specifically that they will act in good faith, the law will apply it.
New Language: condition-percedent
In contract law a condition precedent is an event which must occur, unless its non-occurrence is excused, before performance under a contract becomes due, i.e., before any contractual duty arises.
For comparison, a condition subsequent brings a duty to an end whereas a condition precedent initiates a duty. Condition subsequent refers to an event or state of affairs that brings an end to something else. A condition subsequent is often used in a legal content as a marker bringing an end to one's legal rights or duties. A condition subsequent may be either an event or a state of affairs that must either (1) occur or (2) fail to continue to occur.
Oppenheimer V. Oppenheim (OAD)
Non occurence of condition means not bound.
A. Est-Freedom to contract
B. Predicability/Certainty
Pullman, Comley, Bradley and Reeves v. Tuck-it-away, Bridgeport, Inc. (1992)
A condition the parties did not agree to explicitly but that the law supplied.
Facts: Interpleader action between D and Vestpro (V); The parties signed a contract for the sale of real property, D seller and V buyer; V deposited $100K in escrow with D’s lawyers, P. This is the money in dispute. The contract stated that the closing date was December 10, 1988. V was allowed to extend the closing period for a fee and they did so four times. As the closing date approached they were short on funds, but D refused to allow another extension. On Dec. 10, nothing took place, but 4 doors later D received a letter from V attempting to cancel the contract on three grounds, including that a term of the contract, the size of a plot of land in question, was not accurately represented. Neither party knew of the incorrect description of the land. Both parties claim the other violated the contract.
Issue Whether D’s agreement to deliver title was to simultaneous with the delivery of the money.
Holding: The express language of paragraph 4 of the contract evidenced the parties' intent that the buyer's (Vestpro) d14uty to tender full payment of the purchase price was a condition precedent of the seller's (tuck-it-away) obligation to convey title to it.
Rule: A condition precedent is a fact or event which the parties intend must exist or take place before there is a right to performance.
Rationale: With respect to the time for performance of obligations contained in a contract, the general rule is: "Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language of the circumstances indicate the contrary (Restatement 234). Here, paragraph 4 of the contract provided: "At the closing, on payment of the purchase price as provided above, the seller shall deliver and the buyer shall accept, a full covenant Warranty deed . . . ." This language indicates that the parties agreed that the performances would not be rendered simultaneously, but rather that Vestpro's duty to perform would be a condition precedent to Tuck-it-away's obligation to tender and convey title. Because Vestpro failed on December 10, 1988, to tender the $ 1,800,000 balance due on the purchase price, Tuck-it-away was excused of its obligation to perform under the contract
