Contract Case Law Major Opinions

O’Callaghan v. Waller & Beckwith Realty Co. (IL SC 1958) Contract Case Opinion

P injured by LL’s negligence under a lease which exculpated the LL from liability for negligence. A lease clause exculpating a LL from liability for his own negligence should be upheld & is not void against public policy. BUT most states now hold exculpating clauses for residential leases unenforceable.

Graham v. Scissor-Tail. (1990) Contract Case Opinion

Arbitration clause appointed AFM as arbitrator. P was concert promoter. K of adhesion containing arbitration clause fell w/in reasonable expectations of P since he was subject to thous of same. BUT it was unconcious b/c it would be biased in favor of union member artist.

Henningsen v. Bloomfield Motors, Inc. (NJ SC 1960) Contract Case Law

P injured by steering failure in new car purchased form D under a K in which dealer disclaims all implied warranties of merchantability. At attempt by an auto dealer to disclaim an otherwise implied warranty of merchantability is void against public policy. Disclaimer was insufficient to indicate to RP that he was giving up personal injury claims if car had defect, unequal bargaining positions.

Carnival Cruise Lines, Inc. v. Shute (US SC 1991) Contract Case Law

P injured on Ds ship. Forum selection clause on back of ticket. A forum selection clause in a commercial passage K is permissible if it’s fundamentally fair.

Williams v. Walker-Thomas Furniture Co. (US Ct of App DC 1965) Contract Case Law

P sold to D furniture w/a cross-collateral clause & subsequent to Ds default, sought to replevy all goods previously purchased by D The defense of Unconscionability to action on a K is judicially recognized. CL rule of caveat emptor modified by 2-302, unequal bargaining position here where P exploited D in uncon K provision.

Jones v. Star Credit Corp. (NY SC 1969) Contract Case Decision

P bought freezer (worth $300) for $900. Ps pd $619.98 already. 2-302 permits a ct to reform a K on the basis of excessive price. Factors incl: price to value ratio, financial resources of buyer, knowledge of seller concerning buyer’s situation, relative bargaining position of the parties.

Armendariz v. Foundation Health Psychcare Services (CA SC 2000) Contract Case Law

P signed employment app which incl arbitration clause compelling arbitration for wrongful termination. An adhesive K that incl an arbitration clause requiring adhering party, but not the other, to arbitrate all claims arising out of the same transaction is uncon. K limiting damages of amt of backpay compounds the uncon of agreement.

Klein v. PepsiCo, Inc. (US Ct of App 4th Cir 1988) Contract Case Law

P wanted to buy D’s jet. 2-716 allows nonbreaching buyer to seek SP if goods are unique. BUT No Specific Performance when money damages are adequate. Substitute goods can be purchased to satisfy the original K.

Laclede Gas v. Amoco Oil (US Ct of App 8th Cir 1975) Contract Case Law

After D breached a long-term propane supply K, P sought specific performance of K. Specific Performance is available as a remedy for breach of a K involving personal property (ie. long-term supply K where supply is unique).

Northern DE Industrial Development v. E.W. Bliss (Del 1968) Contract Case Law

P wanted SP of a contract that would have req’d hiring 300 wkrs to complete a second shift. Cts unlikely to order SP where supervision of performance would be impractical. Money damages for losses caused by delay could be determined. Rare to award SP for personal services K.

Walgreen Co. v. Sara Creek Property Co. Contract Case Law

Walgreen had lease that prevented LL from leasing space in mall to another pharmacy. LL gonna lease to Phar-Mor. Ct issued injunction instead of awarding damages to (1) shift burden of determining true cost of Ds conduct from ct to parties. Avoid costly supervision by ct. (2) prices/costs more accurately determined by mkt than by gov’t.

Vitex Manufacturing v. Caribtex Contract Case Law

P was to process wool for D. P reopened factory but D never sent wool to be processed. In a claim for lost profits, overhead should be treated as part of the gross profits & recoverable as damages, & should not be considered as part of the seller’s (processor’s) costs. Overhead should not be treated as a cost saved in computing an award for breach of K b/c it remains constant.

Laredo Hides v. H&H Meat Products Contract Case Law

D refused to continue delivering hides under its K with P, P purchased them from other sources & sued to recover the price difference When a seller wrongfully repudiates a K or fails to make delivery of the goods, the buyer may “cover” by obtaining such goods elsewhere & sue the seller for the difference b/w the costs of cover & the K price plus + incidental or consequential damages.

R.E. Davis Chemical v. Diasonics. (US Ct of App 7th Cir 1987) Contract Case Law

D claimed it lost a “volume sale” when P breached a K of sale. An aggrieved seller may recover, after resale, lost profits from the original sale if he can show that the subsequent sale would have occurred absent the breach and would have been profitable.

US v. Algernon Blair (US Ct of App 4th Cir 1973) Contract Case Opinion

P sues to recover in quantum meruit the value of the labor/materials it furnished up to the pt at which it justifiably ceased work. A promise is allowed to recover in quantum meruit the value of services he gave to a D who breached their K irrespective of whether he would have lost money had the K been fully performed and would thus be precluded from recovering in a suit on the K.

Rockingham County v. Luten Bridge (US Cir Ct of App 1929) Contract Case Opinion

P was to build a bridge. D unjustifiably told P to stop wk under K, but P refused and spent more $ to complete bridge. After an absolute repudiation or refusal to perform by one party to a K, the other party can’t continue to perform and recover damages based on full performance. The nonbreaching party is not permitted to recover damages which he could have avoided by reasonable efforts.

Tongish v. Thomas (KS SC 1992) Contract Case Law

After P lost money on resale K due to D's breach, it contended that the market price measure of damages should be used instead of its actual loss. When a seller breaches, mkt damages should be awarded even though in excess of the buyer’s actual loss. Proper remedy for breach of K to deliver goods is diff b/w K price & market price.

Parker v. 20th Century Fox Film (CA SC 1970) Contract Case Law

P, an actress, was to have the lead role in a movie but D decided not to make that movie and offered her another leading role in a different film. The general measure of recovery by a wrongfully discharged employee is the amt of salary agreed upon for the period of service, less the amt which the employer affirmatively proves the employee has earned or w/reasonable effort might have earned from other employment.

Jacob & Youngs v. Kent (NY Ct of App 1921) Contract Case Law

P built house for D with wrong type of pipe. A trivial & innocent omission will be excused & damages for the minor breach of condition will be allowed rather than holding that there’s a breach of condition forfeiting entire K. Damages should be measured by diminution of value rather than cost of repair, replacement or completion.

Groves v. John Wunder (MN SC 1939) Contract Case Law

When D surrendered land it leased from P, D had deliberately breached K by removing best/richest gravel w/o restoring land to existing grade. Value of land was $12k if restored, cost of restoring was $60k. When willful breach, breaching party may not sue on the K nor invoke benefit of substantial performance to limit damages to the diminution in value. Cost to complete (not diminution in value) is proper remedy.

- anomolous Peevyhouse v. Garland Coal & Mining Co. (OK 1962) Contract Case Law

Where the K provision breached was merely incidental to the main purpose, & where the economic benefit of full performance of work is grossly disproportionate to the cost of performance, the damages are limited to the diminution in value b/c of the non-performance.

Hadley v. Baxendale (Ct of Exchequer 1854) Contract Case Law

P stopped mill b/c of broken crankshaft. D was late in delivering. Normally, damages are those which arise naturally from breach. Damages b/c of special circumstances awarded when P informs D of special circumstances or where these damages are reasonably foreseeable by D at time K is formed.

Delchi Carrier SpA v. Rotorex Corp. (1995) Contract Case Opinion

D sold P nonconforming components. P unable to obtain substitute components from other vendors & lost sales as result. Buyer who accepts order from customers based on quantity of components purchased may recover lost profits on those orders when components are defective and buyer can’t purchase replacement components.

Kenford Co. v. Cty of Erie (NY Ct of App 1989) Contract Case Law

P gave land to D to build sports stadium. D didn’t. P sued for loss of appreciation in surrounding land. Developer not entitled to recover loss of anticipated appreciation in value of real estate surrounding sports stadium when gov’t decides not to build. No indication that D reasonably contemplated that it would assume liability for Ps unrealized appreciation in land values. No tacit agmt that breacher would be liable. Fera v. Village Plaza (MI SC 1976) Contract Case Law

Lessor leased to another tenant b/c he misplaced lease. Although prospective profits for a new biz are usually too speculative, when proof of prospective profits is available, they may be recovered even by a new biz.

Wasserman’s v. Township of Middletown (NYSC 1994) Contract Case Opinion

Lease b/w P and D contained a stipulated damages provision based on Ps gross receipts If liquidated damages are far in excess of actual losses, the clause may be an unenforceable penalty.

Dave Gustafson v. State (SD 1968) Contract Case Law

P performed highway construction wk for state. K had liquidated damages clause, P delayed. Liquidated damages clauses should be enforced when they’re fair & reasonable attempts to fix just compensation for anticipated loss caused by breach of K. Useful when damages are uncertain in nature/amt or are unmeasurable.

Gianni v. R. Russell (PA SC 1924) Contract Case Law

P rented space to sell fruit, candy, soda. D allowed another to sell soda. P claimed D agreed to give P sole right sell soda in building at time of lease negotiations though not in written lease. All preliminary negotiations, conversations, & verbal agreements are merged in & superseded by the subsequent written K, and unless fraud, accident, or mistake is alleged, the writing constitutes the agreemt and its terms can’t be added to or subtracted from by parol evidence.

Masterson v. Sine (CA SC 1968) Contract Case Law

P transferred prop to relatives reserving option to repurchase for 10 yrs. Relatives went bankrupt, P sought to exercise the option. Evidence of oral collateral agmts should be excluded only when the fact finder (ct) is likely to be mislead. The parol testimony as to the limitation of assignment should have been admitted since that term would not necessarily have been included. Parol evidence can be shown to prove elements of part of agmt that’s not reduced to writing.

MCC- Marble Ceramic Cntr v. Ceramica Nuova D’Agostino (11th Cir 1998) Contract Case Law

D sells tiles to P. Terms on Ds form Ks were in Italian. CISG permits an inquiry into a party’s subjective intent so long as the other party was aware of that intent. Appears to be a rejection of the PER by CISG.

Bollinger v. Cent. PA Quarry Strip & Const (PA SC 1967) Contract Case Law

P contracted to permit D to deposit its construction waste on P's prop if it removed topsoil & covered the waste w/it. This oral condition was not incl in the written agreement and was omitted by mistake. D didn’t remove topsoil. A ct of equity has the power to reform a writing and make it correspond to the understanding of the parties on the ground of mistake as long as that mistake is mutual.

Frigaliment Importing v. B.N.S. International Sales (US Dist Ct 1960) Contract Case Law

D K’d to sell “chicken” to P. D shipped stewing chicken instead of broiling & frying chicken. The party who seeks to interpret the terms of the K in a sense narrower than their everyday use bears burden of persuasion to so show.

Raffles v. Wichelhaus (Ct of Exchequer 1864) Contract Case Opinion

D agreed to buy cotton to be shipped by P aboard “Peerless.” 2 ships w/that name. When a term used to express an agmt is ambivalent & the parties understand it differently, & neither of them is aware of the others' understanding, there can be no K.

Oswald v. Allen (2d Cir 1969) Contract Case Law

Swiss Coin Collection & Rarity coins. Rarity collection incl some Swiss coins Agmt not enforceable under Raffles b/c no sensible basis for choosing b/w conflicting understandings of the parties.

WWW Associates v. Giancontieri (NY Ct of App 1990) Contract Case Law

K contained a reciprocal cancellation provision. Extrinsic evidence can’t be considered in order to create an ambiguity in written agmt. Before such evidence be considered, ct must find an ambiguity in the written K.


PG&E v. G.W. Thomas Drayage & Rigging (CA SC 1968) Contract Case Law

D obtained insurance policy covering only 3rd party liability. P argues that intention was to cover property as well. D offers prior Ks indicating only 3rd party property covered. Evidence as to the meaning of a K term must be admitted if K language is reasonably susceptible to the meaning argued for by the evidence. Extrinsic evidence may only be excluded when it’s feasible to determine meaning of wds from the instrument itself.

Delta Dynamics v. Arioto (CA 1968) Contract Case Law

A separate K provision allowed recovery of attorneys’ fees in any action for damages. Ct allowed extrinsic evidence to show whether a termination provision was an exclusive remedy.

Hurst v. WJ Lake & Co (OR 1932) Contract Case Law

Horse scrap meat. Different prices for meat that were above or below 50%. 140 tons were 49.53-49.5%. In dealings b/w tradesmen, meanings of the terms of the trade should take precedence. PE admissible in order to explain the trade meanings.

Dalton v. Educations Testing Service (NY Ct of App 1995) Contract Case Law

ETS allowed to cancel test score if it found reason to question validity of the score after offering test-taker 5 options to respond to D's concerns. P is entitled to SP of D's promise to consider P's evidence in good faith. Implied good faith requirement.

Burger King Corp v. Weaver (1999) Contract Case Opinion

D purchased 2 franchises from BK. BK authorized another franchise & D stopped paying. P sues, D counterclaims breach of Ps duty of good faith and fair dealing. Implied covenant of good faith & fair dealing does not support an independent CoA where alleged breaching party has performed the express K’l provision & the implied covenant would vary the express terms of the K.

Eastern Airlines v. Gulf Oil Contract Case Law

D claims Ps practice of fuel freighting is a breach of K. Evidence indicates practice is established in the industry. An established course of performance & dealing b/w parties, which is also an established usage of trade, becomes part of the terms of the K when not objected to.

Market Street Assoc v. Frey Contract Case Opinion

P allegedly deliberately failed to notify D of an obscure clause that could result in forfeiture of Ds property. Diff b/w superior market info & taking advantage of K partner. Duty of good faith doesn’t require complete candor; party may take advantage of another based on superior knowledge of market. BUT a party may not intentionally exploit the other party’s oversight of an important fact.

Dickey v. Philadelphia Minit-Man Corp Contract Case Law

Lease based on percentage of D’s gross sales, w/a minimum rent. D discontinued certain biz, P sued for ejectment. General rule: lease provision specifying certain use of premises is a covenant against a noncomplying use, not a covenant to use. No implied obligation for a lessee to continue to conduct a biz specified in lease if its failure to do so result in less rent to lessor. In other cases where rent based on gross receipts but no minim, courts have imposed an implied covenant to continue biz.

Bloor v. Falstaff Brewing Corp. Contract Case Law

P alleged D breached its K’l obligation to use its “best efforts to promote & maintain a high vol of sales.” A K’l provision obligating one to use its “best efforts” to promote & maintain a high vol of sales of a certain product is breached by a policy which emphasizes profit w/o fair consideration of the effect on sales vol.

Zilg v. Prentice-Hall Contract Case Decision (US Ct of App 1983)

Prentice-Hall cut original printing & reduced ad budget. A K’l agmt to publish a bk, reserving right to publisher to exercise its discretion, does not incl an implied obligation to aggressively promote the bk.

Bak-A-Lum v. Alcoa Building Products (NJ SC 1976) Contract Case Law

D canceled an exclusive distributorship agmt w/P after it knew that a new warehouse lease had been entered into by P. Exclusivity agmts that don’t specify duration are terminable at will of either party. Limitation: when agent has in good faith incurred expense/time/effort in developing biz, allowed to recoup investment. D could terminate K or just the exclusivity feature w/o paying compensation to P since P had 8/9 yrs of exclusivity but needed notice.

Sheets v. Teddy’s Frosted Foods (CT SC 1980)Contract Case Law

P fired for complaining about noncompliance w/state regulations. Generally Ks of permanent employment are terminable at will but one may maintain action for wrongful discharge if he can prove that the discharge violates public policy.

Balla v. Gamgro (IL 1991) Contract Case Decision

P was in house counsel for D. P reported illegal activity to FDA, was fired. In-house counsel normally can’t claim tort of retaliatory discharge. P had duty as atty to report, thus no fork b/w losing job or reporting. Client may discharge atty any time.

Nanakuli Paving & Rock v. Shell Oil (US Ct of App 1981) Contract Case Law

D contended it was not obligated to price protect P, and its conduct in the past didn’t constitute a course of conduct governing the K. Trade usage & course of performance will be read into Ks where such are so prevalent the parties would have to have meant to incorporate them in the terms of the K.

Columbia Nitrogen v. Royster Co (4th Cir 1971) Contract Case Law

P D wanted to introduce evidence on usage of trade & course of dealing to show that specific K price was not to be binding on parties. 2-202 authorizes evidence of usage of trade & course of dealing b/w parties to explain or supplement a K.

Luttinger v. Rosen (CT SC 1972) Contract Case Law

Obtaining mortgage w/interest rate was condition precedent to K. D unable to obtain mortgage. P offered to compensate for failure of the condition precedent. A condition precedent is a fact or event which the parties intend must exist or take place b/4 there is a right to performance, & if the condition precedent is not fulfilled, K is not enforceable. P not req’d to accept D's compensation for failure of condition.

Internatio-Rotterdam v. River Brand Rice Mills (2d Cir 1958) Contract Case Law

P was to provide shipping instructions at least 2 weeks prior to delivery of rice. P didn’t, D canceled K. A condition, which is an act or event, other than a lapse of time, must be literally complied with. Notification was a condition precedent to D’s duty to ship.

Peacock Constr. v. Modern Air Conditioning (FL SC 1977) Contract Case Law

D failed to pay sub (P) claiming Owner paying was a condition precedent. Ambiguous provisions in subKs which don’t expressly shift the risk of payment failure by owner to subcontractor will be interpreted as constituting absolute promises to pay and not as setting pmt by the owner as a condition precedent to payment.

Gibson v. Cranage (MI SC 1878) Contract Case Law

P contracted to make a portrait for D. If portrait failed to satisfy D, D need not accept/pay. D not satisfied w/ portrait, & P sued for the K price. Where parties deliberately entire into an agmt which violates no rule of public policy & is free of fraud or mistake, no hardship in holding them bound by it. Contractual liability may be conditioned on subjective personal satisfaction.

Doubleday v. Curtis (2d Cir 1985) Contract Case Law

Curtis (D) wrote manuscript P deemed worthless. P offered editorial assistance that D refused. Law requires party who terminates K to act in good faith. Where K contains satisfaction clause, it may be terminated only as a result of honest dissatisfaction. Ps duty of good faith incl providing editorial assistance.

McKenna v. Vernon (PA 1917) Contract Case Law

D asserted P needed certificate only at last progress pmt. Constant/repeated disregard on owner to exact compliance w/provision. Now too late for him to insist that failure on the part of the P to secure certification before suit defeats his right of action. Owner waived it repeatedly. Hicks v. Bush (NY 1962) Contract Case Law

Written K made no mention of the condition (orally agreed to) that sum of money had to be raised in order for written doc to take effect. PER says oral agmt can’t be used as evidence to contradict written agmt. However, if oral agmt is for a condition precedent to the effectiveness of K, then such evidence may be introduced.

Kingston v. Preston (King’s Bench 1773) Contract Case Law

P to take over D’s biz. P had to make payments & show security, which he didn’t do. P sued saying D still had to deliver biz, arguing that covenants were mutual & independent. D argues dependent covenant. Covenant was cond’l & dependent. Performance of one party depends on prior performance of other. Until prior condition performed, other party not held to performance of his covenant. Performance of 1st covenant is implied condition precedent to the duty to perform the 2nd covenant.

Stewart v. Newbury (NY App 1917) Contract Case Law

P alleged he was to be pd in “usual manner” even though not written into K. When D failed to pay, P stopped wk. Where a K is made to perform wk and no agmt is made as to payment, the work must be substantially performed b/4 payment can be demanded.

Plante v. Jacobs Contract Case Law

P built D house w/misplaced wall. D refused to finish paying. P refused to complete job and sued for breach of entire K. P rendered substantial performance and is due K price. D should receive damages for P's failure in finishing home. Unjust to let owner retain value of building w/o payment b/c of small mistakes.

Gill v. Johnstown Lumber Contract Case Law

P K’d to drive & deliver 4 mill ft of logs but had delivered only a part of that amt when flood swept away rest of logs. When consideration for work done is apportioned/apportionable in K, that K will be interpreted as divisible/severable in case of part performance.

Britton v. Turner Contract Case Law

P wkd for D for 9 ½ mo when K specified 1 yr. Restitution – Employee may recover reasonable value of services (benefit to employer) less damages employer suffers by reason of early termination, w/K providing limit on amt of recovery.

Kirkland v. Archbold Contract Case Law

P to repair/improve D's prop but defaulted after partial performance. Restitution – negligent breach shouldn’t be treated same as willful breach where forfeiture of value of wk completed is punishment. Award reasonable value of wk done less damages suffered by D thru incomplete wk.

Walker v. Harrison Contract Case Law

D rented electric sign which was hit w/tomato. D refused to make further pmts until P cleaned sign. A party attempting to repudiate a K must convince the ct that the other party has materially breached the K.

K&G Construction v. Harris Contract Case Law

D breached his covenant to perform in a workmanlike manner, P declined to pay b/c of bulldozer damage. D refused to perform further, causing damage to P. Whenever possible, according to the intentions of the parties and the good sense of the case, mutual promises in a K will be regarded as dependent covenants. Modern rule – mutual promises in K are presumed dependent.

Iron Trade v. Wilkoff Contract Case Law

D to deliver rails to P but refused to do so after P reduced available supply and made D's performance more difficult. A party who prevents the other party from performing may excuse other party’s performance. BUT mere difficulty of performance will not excuse a breach of K even though that difficulty was created by other party.

New England Structure v. Loranger Contract Case Law

D was to construct gypsum roof on school, terminated deal contending that D failed to provide enough skilled workmen as req’d by K. When notification of a ground for termination is sent to a party deemed to be in breach, the notifier is NOT limited to that ground in defending his action.

Hochester v. De La Tour (Queen’s Bench 1853) Contract Case Law

P contracted to be a courier for D for 3 months. D changed mind b/4 P was to start. P sues and is in ct b/4 the K was to arise. When promisor repudiates K b/4 date set for performance, P may either wait until date set for performance or sue immediately.

Kanavos v. Hancock Bank & Trust Co (MA SC 1985) Contract Case Law

D sold stock to which P had earlier been given a K’s right of first refusal. To recover for breach of K, owner of a right of first refusal must prove that, had he been notified of the impending sale, he would have been ready, willing, and able to exercise his right. Ability to perform is a constructive condition.

McCloskey & Co. v. Minweld Steel Co. (US App 1955) Contract Case Law

P requested assurance that the work would be completed w/in 30 days. D asked for help in obtaining steel. P sued D for anticipatory breach. To show an anticipatory breach, the party breaching must express an absolute & unequivocal refusal to perform.

C.L. Maddox, Inc. v. Coalfield Services, Inc (7th Cir 1995) Contract Case Law

P to do wk for D. D began working, P failed to sign D’s proposal. P tried to insert a liquidated damages clause unlikely to be accepted. One party may cease performance under an oral K where other party refused to sign a written K.

Cosden v. Helm Contract Case Law

When a seller anticipatorily repudiates a K, buyer’s damages should be based on the mkt price at a commercially reasonable point after the seller notifies the buyer of the repudiation.

Pittsburgh-Des Moins Steel v. Brookhaven Manor Water (US App 1976)Contract Case Law

P contended that D repudiated K by failing to meet a demand for a personal guarantee of payment prior to performance of the K. 2-609 allows a party to cease performance due to the repudiation of the other only where the repudiating party fails, upon demand, to give assurance of payment. Here no cause for assurance was shown.

Norcon Pwr v. Niagara Hohawk Pwr Contract Case Law

Party has right to demand adequate assurance of future performance when reasonable grounds arise to lead that party to believe that the other party will commit a breach of nonperformance where K not governed by UCC.

Stees v. Leonard Contract Case Law

D tried to build on quicksand 2x. If one binds himself by a positive, express K to do an act in itself possible, he must perform unless prevented by act of God, the law or the other party to K & will not be excused by hardship, unforeseen hindrance or difficulty short of absolute impossibility.

Taylor v. Caldwell Contract Case Law

P to use D’s music hall for concert. Hall destroyed by fire, neither party at fault. Both parties to K are excused. In a K where the performance depends on cont’d existence of a person/thing, a condition is implied that the impossibility of performance arising from the perishing of the person/thing shall excuse the performance of the K.

Transatlantic Financing Corp Contract Case Law

D chartered P’s vessel to carry cargo from US to Iran. B/c of closing of Suez, P made extended voyage and sued D for increased expenses. When impossibility alleged, ct must construct a condition of performance based on changed circumstances involving: (1) a contingency, something unexpected, must have occurred, (2) risk of unexpected occurrence must not have been allocated by agmt or custom and (3) occurrence of contingency must have rendered performance commercially impracticable.

Krell v. Henry Contract Case Law

Man rents room to watch coronation which was canceled. Where purpose of K is frustrated by an unforeseeable supervening event, and the purpose was w/in the contemplation of both parties when K was made, then performance is excused.



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