Contracts Questions Forum

[swtlilsoni]

ask in here

I'll start:

I'm confused about Constructive Condition of Exchange (you don't have to pay if builder doesn't substantially perform). If the builder backs out without substantially performing, isn't that just a breach? Don't you not have to pay anyway since there is a breach? When do you do the breach analysis and when do you do the Constructive Condition of Exchange analysis....it seems redundant

[kraeton]

DELETED FOR BEING SHIT.

[kraeton]

You know what? I feel like I'm just confusing the issue, and it's kinda hard not to considering the issue's complexity, but I'll try to clear some stuff up.


You know how when you learn "conditions" in K, they tend to divide it into 2 species:

Category I: Express & Implied Condition (CCE: Constructive Condition of Exchange)

Category II (Timing): Condition Precedent (90% of MBE questions), Condition Concurrent, Condition Subsequent

The big "confusion" is that they all share the same word "condition," but they should probably be treated as a complete different species altogether.


Honestly, CCE, or an Implied Condition in the vast majority of contexts that I've been exposed to is just basically a non-dumbass effort by the promisee to perform given the implications of the contract language rather than something about TIMING. If the contract language does not have an Express Condition, then using common sense, you figure out what is "IMPLIED."

If you're an architect, and you contract with Yao Ming to build a house for him, and let's say you build a beautiful house... except that you forgot he's a f'n giant so all of your designs are made with "normal people" specs. The next step is that you make a factual determination as to whether you, the architect, fucked up, and exactly how bad: "Substantial Performance?" "Material breach?" yes or no.

Well... Yao can barely fit in his house, so I'd imagine that's obviously a material breach and you the architect didn't substantially perform. Unless it's super obvious, the MBE at the very least will refrain from asking you questions about material breach considering it's a factual determination.

The even more confusing part and probably the one that most concerns you is that like i said in my last sentence in the previous post: a failure of a promise--> breach; a failure of a condition ----> relieves a party's performance obligation.

So, you, the architect haven't breached so much as you failed to fulfill an implied condition. Failure to fulfill an implied condition excuses further performance... and what's the latter performance due? Getting paid $$$$$$. Ergo, because you failed to satisfy the implied condition/the Constructive Condition of Exchange, you don't get the EXCHANGE, the consideration that induced you to performance ($$$$$$$). Really read into why the CCE is called the CCE one word at a time. You fucked up!!! Yao is not happy with you.

So... are you, the architect, being punished for a breach of the K? Strictly speaking, No... you simply failed to satisfy a condition that would have triggered the LATER OBLIGATION from Yao of paying your ass.

Notice my focus on the chronology of the obligations. People take it for granted that you build the house first--> THEN you get paid, but this default rule was made in common law like 300 years ago that IF the contract does not EXPLICITLY mention the timing of the conditions owed, then the one that can be immediately done (e.g. paying up, take out your wallet, access your online banking account) comes later compared to the one that takes longer (e.g. designing/building a house). If you wrote explicitly into the K, that you get paid first, then you build the house, then that becomes the rule.

300 years ago, this default rule was not assumed, and both parties blamed each other saying "i didn't build it yet cause you didn't pay me asshole," and the other party saying, "I didn't pay because you built diddly squat dickwad" leading to a legal impasse of utter bullshit (or as i like to call it.. "the law."), because there were no rules on TIMING of PARTIES' OBLIGATIONS.

Trust me though, the confusion between the condition and the promise is totally f'n universal. I mean.. the Restatements explicitly states that "Ambiguity as to whether a statement creates a promise or a condition is usually resolved in favor of a promise over a condition." (Restatement 2, Section 227). I'm assuming they wrote that because if there were clear-cut distinctions between the 2, they wouldn't need to say this, which means there aren't clear-cut distinctions a lot of the time.

Remember that the bias of Contract Law is to find a promise/contract even when there is frankly none or not enough of one. Just look at the default rule as to whether a promise is illusory or not. The courts will bullshit manifest a consideration out of thin air just to make an illusory promise a CONTRACT if even remotely possible.

This is my note on the matter: "The modern approach, however, is to construe a promise wherever possible so as not to be illusory. This can be done, for example, by reading into the promise an obligation to exercise discretion in good faith. Essentially, the "good faith" is construed as the consideration."

Oh what, you thought "good faith" was an implied covenant of the entirety of K law, and thus, acting in "good faith" is a pre-existing duty which means it can't be consideration? Well... you know why it is? Cause fuck you that's why... it's consideration now. For those of you who use Adaptibar, that note is in reference to Question #971.

So, if you ever come across a problem where it's super confusing as to whether it's a condition or a promise, it's very probable that it'll be construed as a promise.

CONCLUSION: This is bullshit, fuck this exam, I'm getting some beer.

[swtlilsoni]

You know what? I feel like I'm just confusing the issue, and it's kinda hard not to considering the issue's complexity, but I'll try to clear some stuff up.


You know how when you learn "conditions" in K, they tend to divide it into 2 species:

Category I: Express & Implied Condition (CCE: Constructive Condition of Exchange)

Category II (Timing): Condition Precedent (90% of MBE questions), Condition Concurrent, Condition Subsequent

The big "confusion" is that they all share the same word "condition," but they should probably be treated as a complete different species altogether.


Honestly, CCE, or an Implied Condition in the vast majority of contexts that I've been exposed to is just basically a non-dumbass effort by the promisee to perform given the implications of the contract language rather than something about TIMING. If the contract language does not have an Express Condition, then using common sense, you figure out what is "IMPLIED."

If you're an architect, and you contract with Yao Ming to build a house for him, and let's say you build a beautiful house... except that you forgot he's a f'n giant so all of your designs are made with "normal people" specs. The next step is that you make a factual determination as to whether you, the architect, fucked up, and exactly how bad: "Substantial Performance?" "Material breach?" yes or no.

Well... Yao can barely fit in his house, so I'd imagine that's obviously a material breach and you the architect didn't substantially perform. Unless it's super obvious, the MBE at the very least will refrain from asking you questions about material breach considering it's a factual determination.

The even more confusing part and probably the one that most concerns you is that like i said in my last sentence in the previous post: a failure of a promise--> breach; a failure of a condition ----> relieves a party's performance obligation.

So, you, the architect haven't breached so much as you failed to fulfill an implied condition. Failure to fulfill an implied condition excuses further performance... and what's the latter performance due? Getting paid $$$$$$. Ergo, because you failed to satisfy the implied condition/the Constructive Condition of Exchange, you don't get the EXCHANGE, the consideration that induced you to performance ($$$$$$$). Really read into why the CCE is called the CCE one word at a time. You fucked up!!! Yao is not happy with you.

So... are you, the architect, being punished for a breach of the K? Strictly speaking, No... you simply failed to satisfy a condition that would have triggered the LATER OBLIGATION from Yao of paying your ass.

Notice my focus on the chronology of the obligations. People take it for granted that you build the house first--> THEN you get paid, but this default rule was made in common law like 300 years ago that IF the contract does not EXPLICITLY mention the timing of the conditions owed, then the one that can be immediately done (e.g. paying up, take out your wallet, access your online banking account) comes later compared to the one that takes longer (e.g. designing/building a house). If you wrote explicitly into the K, that you get paid first, then you build the house, then that becomes the rule.

300 years ago, this default rule was not assumed, and both parties blamed each other saying "i didn't build it yet cause you didn't pay me asshole," and the other party saying, "I didn't pay because you built diddly squat dickwad" leading to a legal impasse of utter bullshit (or as i like to call it.. "the law."), because there were no rules on TIMING of PARTIES' OBLIGATIONS.

Trust me though, the confusion between the condition and the promise is totally f'n universal. I mean.. the Restatements explicitly states that "Ambiguity as to whether a statement creates a promise or a condition is usually resolved in favor of a promise over a condition." (Restatement 2, Section 227). I'm assuming they wrote that because if there were clear-cut distinctions between the 2, they wouldn't need to say this, which means there aren't clear-cut distinctions a lot of the time.

Remember that the bias of Contract Law is to find a promise/contract even when there is frankly none or not enough of one. Just look at the default rule as to whether a promise is illusory or not. The courts will bullshit manifest a consideration out of thin air just to make an illusory promise a CONTRACT if even remotely possible.

This is my note on the matter: "The modern approach, however, is to construe a promise wherever possible so as not to be illusory. This can be done, for example, by reading into the promise an obligation to exercise discretion in good faith. Essentially, the "good faith" is construed as the consideration."

Oh what, you thought "good faith" was an implied covenant of the entirety of K law, and thus, acting in "good faith" is a pre-existing duty which means it can't be consideration? Well... you know why it is? Cause fuck you that's why... it's consideration now. For those of you who use Adaptibar, that note is in reference to Question #971.

So, if you ever come across a problem where it's super confusing as to whether it's a condition or a promise, it's very probable that it'll be construed as a promise.

CONCLUSION: This is bullshit, fuck this exam, I'm getting some beer.

lol! thank's so much for your detailed reply. so it seems to boil down tow hat you said - failure of a promise is a breach, failure of a condition relieves performance. and the confusion is whether to consider it a promise or a condition.. BUT *this is what I am trying to get at* does it matter whether it is a promise or a condition? because if it is failure of a condition, performance is relieved, BUT EVEN IF IT IS FAILURE OF A PROMISE, performance is STILL relieved. So either way, performance is relieved. So who cares if it is failure of a promise or condition if end result is the same?

[BrokenMouse]

.

[kraeton]

This is the last I'll speak on this subject as I feel like I'm just getting more confused the more i think about it, but I'm not so sure I agree with above poster.

I think your initial intuition re: the nature of the distinction is correct. They really are 2 sides of the same coin. Every obligation/promise could in some way be interpreted as a "condition" species. A 2 sentence Contracts MBE hypo of a homeowner selling his house to a buyer with no indication of TIMING can invariably be interpreted not just simply

Promise 1: Hand over warranty deed of House and

Promise 2: Give $100K.

Once again, if there is no indication of Timing. It will be assumed based on the facts that these are conditions concurrent. The logic is that both obligations do not require a ton of time. Both involve the exchange of documents or paper after all.

If, however, one promise takes noticeably longer than the other, this time between a homeowner and a builder,

Promise 1: Build a garage

Promise 2: Give him $10K.

Then the PROMISE that takes longer, "in stages," will be assumed to be the condition precedent, since that goes FIRST, which upon its completion, will trigger the other party's obligation to pay the $10K.

The only reason to distinguish whether "build a garage" is a PROMISE or a CONDITION PRECEDENT depends fully on the issue of the case/hypo/MBE question if timing is an actual concern. These terms are not mutually exclusive... not at all.

I imagine that while every promise is a condition, not every condition is necessarily a promise. For example, if you condition your performance (e.g. sell buyer your Jordans) based on the Knicks winning the NBA Championships ( ), that condition doesn't have anything to do with you assuming you don't own the Knicks or poison them. It's an external, independent event of which you have no control. In that situation, the condition is not a promise.

However, every promise is a condition in that every promise has to have some element of TIMING... because we exist in the physical world of time-space. And unless we attach TIMING of obligations to promises, we WILL NOT KNOW who is truly breaching, since both sides could argue whose TURN it is without the conditions telling us the ORDER of promises.



Honestly, don't worry about this lolol. I honestly can't imagine this ever being an issue.

If you see a condition problem on the MBE... well, it's hilariously obvious they want you to focus on Conditions. For fuck's sake, answer choices a, b, c, and d have the words "condition precedent," or "condition subsequent" plastered all over it. Then put your Condition hat on and apply Condition Rules, and get your Condition answer, and you're good to go.

As you can tell from everything I've typed, the truth you're searching for is closer to bullshit philosophy on what "X" means... I mean... what does it REALLY mean as you're stoned out of your mind.

It's not important. It's virtually impossible to miss out on what the exam makers are asking for whether it's a MBE question or a hypo, there can be no confusion.

As you've already stated the end result is the same in that a breach of the K has occurred.

Then to calculate damages, you put on your DAMAGES hat on and proceed. I'm not ultra-knowledgeable but based on my studies, I don't see any reason to differentiate damages based on whether a condition has been broken, or an actual BREACH has occurred, since it basically just boils down to the same thing.

[joyemorris]

I LOVE the way you break things down! Do you tutor? I've already learned a lot just from reading your posts. I'd love to hear how you break other issues down!