Conditions - Next Generation Bar Exam

1. Under the Restatement (Second), when may a court excuse the non-occurrence of a condition to avoid forfeiture?

   When the condition is not a material part of the exchange and enforcing it would cause disproportionate forfeiture. The court weighs the loss to the party seeking excuse against the importance of the condition to the other party.

2. When one party's performance requires a period of time and the other's does not, which must be performed first?

   The performance that requires a period of time. For example, a builder must perform before the owner's payment for that work becomes due, absent agreement otherwise.

3. By what doctrine is a condition excused when the obligor wrongfully hinders its occurrence?

   The prevention doctrine. A party who wrongfully prevents a condition breaches the implied duty of good faith and cannot rely on the condition's failure.

4. What is a condition precedent?

   An event, not certain to occur, that must occur before a duty of performance becomes due. If the condition fails and is not excused, the duty never arises.

5. When performances can be exchanged at the same time, what constructive condition governs?

   Concurrent conditions: each party must tender its own performance to put the other in breach. Sales of land for cash and sales of goods on delivery are typical concurrent exchanges.

6. What standard governs whether a constructive condition of exchange has been satisfied?

   Substantial performance. Courts imply constructive conditions to secure the exchange and avoid forfeiture, so less than perfect performance suffices.

7. When it is doubtful whether a term creates a promise or a condition, which interpretation do courts prefer?

   A promise. Treating the term as a promise avoids forfeiture, since breach of a promise gives damages rather than discharge.

8. What standard governs whether an express condition has been satisfied?

   Strict compliance. Because the parties expressly made the event a condition, even a slight deviation means the condition has not occurred.

9. What standard applies to a satisfaction clause concerning personal taste, fancy, or judgment, such as a portrait?

   A subjective standard: honest, good-faith dissatisfaction. The obligor may reject the performance only if genuinely dissatisfied, not as a pretext.

10. How may a party excuse a condition that exists for its own benefit?

    By waiving it, provided the condition is not a material part of the agreed exchange. Waiver may be express or by conduct and may be retracted before the condition's time unless the other party has relied.

11. What standard applies to a satisfaction clause concerning commercial quality, operative fitness, or mechanical utility?

    An objective standard: whether a reasonable person would be satisfied. Where satisfaction can be measured objectively, the law presumes the parties intended that standard.

12. Payment is conditioned on an architect's certificate of completion, and the architect withholds it in bad faith. What is the effect on the condition?

    The condition is excused. A certifier's bad-faith refusal, or a refusal procured by the obligor, cannot be used to defeat the claim.

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