Question 1

What is the effect of frustration on a contract? What,at common law,happens to a deposit paid prior to a contract being frustrated?

Accepted Answer

The doctrine of frustration discharges the parties to the contract from further performance under the contract.Past performance is not usually affected.Under common law,a deposit that has been paid by one of the parties is returned if no beneficial performance has taken place and retained if there has been any beneficial performance under the contract.

Question 2

In material alteration,

Accepted Answer

A) the parties are directly concerned with the discharge of an existing contract. 
B) the parties are basically preoccupied with the new arrangement,and the discharge of the old contract is incidental. 
C) a replacement of one of the parties discharges the original contract and substitutes a new one. 
D) there is an agreement not to proceed with performance of a contract already in existence. 
E) none of the above 
A) the parties are directly concerned with the discharge of an existing contract. 
B) the parties are basically preoccupied with the new arrangement,and the discharge of the old contract is incidental. 
C) a replacement of one of the parties discharges the original contract and substitutes a new one. 
D) there is an agreement not to proceed with performance of a contract already in existence. 
E) none of the above B

Question 3

A party to a contract might forego the defence of frustration by

Accepted Answer

A) making it a condition precedent. 
B) being in a province that has its own Frustrated Contracts Act. 
C) placing an exemption clause on everything. 
D) making it a condition subsequent. 
E) an express promise worded in such an absolute and unconditional way as to rule out any reservation for the party's benefit. 
A) making it a condition precedent. 
B) being in a province that has its own Frustrated Contracts Act. 
C) placing an exemption clause on everything. 
D) making it a condition subsequent. 
E) an express promise worded in such an absolute and unconditional way as to rule out any reservation for the party's benefit. E

Question 4

Clyde entered into a contract with Lucy Produce to supply eight tons of tomatoes.A flood destroyed the field where Clyde was growing his tomatoes,so he refused to supply the tomatoes.What legal grounds could Clyde advance for not supplying the tomatoes? What is Lucy Produce's best defence? What is the likely outcome of an action commenced by Lucy Produce for breach of contract?

Accepted Answer

Clyde would rely on the doctrine of frus

Question 5

A and B agree in writing that A will sell to B $5000 in widgets by September 1.On August 28th,B tenders payment of the $5000.00 on A,who refuses to accept it and later refuses to deliver the widgets to B because their value went up after the contract was entered into.In this case,if A sues B for breach of contract and B successfully counterclaims for specific performance,

Accepted Answer

A) A is in breach of contract and B will only have to pay the $5000.00,but no interest or costs. 
B) by not continuously trying to ensure that A accepts the $5000.00,B is in breach of contract. 
C) A is in breach of contract and B is not bound to do anything more. 
D) the contract is at an end. 
E) none of the above 
A) A is in breach of contract and B will only have to pay the $5000.00,but no interest or costs. 
B) by not continuously trying to ensure that A accepts the $5000.00,B is in breach of contract. 
C) A is in breach of contract and B is not bound to do anything more. 
D) the contract is at an end. 
E) none of the above

Question 6

A unilateral contract is discharged by performance when

Accepted Answer

A) performance is genuinely attempted by both parties even if one party's performance is incomplete. 
B) a term of the contract specifies an event that must occur before the contract will proceed and that event does not occur. 
C) both parties attempt tender of performance. 
D) both parties perform all their obligations under the contract. 
E) an act of God occurs after the contract is entered into. 
A) performance is genuinely attempted by both parties even if one party's performance is incomplete. 
B) a term of the contract specifies an event that must occur before the contract will proceed and that event does not occur. 
C) both parties attempt tender of performance. 
D) both parties perform all their obligations under the contract. 
E) an act of God occurs after the contract is entered into.

Question 7

Since any possible frustrating event can be made a term of the contract,why do we need the doctrine of frustration?

Accepted Answer

To have any frustrating event be part of

Question 8

A sells goods to B for $5000.00 and no deposit is paid.Before the balance of the goods is delivered,the goods are destroyed.In this case,at common law,explain whether the seller will get anything for the value of the goods delivered.

Accepted Answer

At common law,the seller will

Question 9

A truck slides off a mountain road in a snow storm.The contents,Nike shoes,are spread all over a ravine far below.Explain how the seller of the goods,who retained title,might use frustration in his defence.

Accepted Answer

Because of frustration,both parties are

Question 10

A novation agreement respecting a party or parties is only effective if

Accepted Answer

A) the new party introduced by novation consents in writing. 
B) the creditor serves notice in writing on the debtor. 
C) the parties to the original contract and the new party introduced by novation all give their consent. 
D) all parties to the agreement have already performed their obligations under the agreement. 
E) the replacement contract contains a clear condition precedent. 
A) the new party introduced by novation consents in writing. 
B) the creditor serves notice in writing on the debtor. 
C) the parties to the original contract and the new party introduced by novation all give their consent. 
D) all parties to the agreement have already performed their obligations under the agreement. 
E) the replacement contract contains a clear condition precedent.

Question 11

For a contract to be fully discharged,one party must complete performance.

Accepted Answer

A) True 
 B)False

Question 12

Four partners own the used car dealership Square Deal Ltd.The company needed more working capital,so the partners went to the bank officer for a loan.The bank officer stipulated that she would approve the loan application if each of the owners signed a personal guarantee on the loan.This was agreed to by the four,but when it came time for signing,one of the partners was on an extended trip to Asia and couldn't be reached.The other three signed the document.Based on the three guarantees,the bank decided to go ahead with the loan to Square Deal Ltd.Are the guarantees enforceable against the three partners?

Accepted Answer

A) Yes,they are,since the bank extended the loan without objection from the partners. 
B) No,they are not,because the partner in Asia had the "deep pockets." 
C) Yes,they are,since there was good consideration given. 
D) No,they are not,since the condition precedent was never met. 
E) No,they are not,because there was a definite lack of consideration. 
A) Yes,they are,since the bank extended the loan without objection from the partners. 
B) No,they are not,because the partner in Asia had the "deep pockets." 
C) Yes,they are,since there was good consideration given. 
D) No,they are not,since the condition precedent was never met. 
E) No,they are not,because there was a definite lack of consideration.

Question 13

A company that installs heavy equipment is to be paid upon the completion of each stage in the tooling of a new factory.Yet it is the factory owner's own chief engineer who does the inspection and makes the approval of each stage.Will the courts enforce this arrangement as a condition precedent?

Accepted Answer

A) Yes,they will,because both parties agreed to this arrangement in the contract. 
B) No,they won't,but any dispute can be settled based on fairness and equity. 
C) Yes,they will,since this is the way things are done in the trade. 
D) No,they won't,since there is an obvious conflict of interest. 
E) No,they won't,since quantum merit should apply in this situation. 
A) Yes,they will,because both parties agreed to this arrangement in the contract. 
B) No,they won't,but any dispute can be settled based on fairness and equity. 
C) Yes,they will,since this is the way things are done in the trade. 
D) No,they won't,since there is an obvious conflict of interest. 
E) No,they won't,since quantum merit should apply in this situation.

Question 14

Charles and his family live in Halifax.He was offered a good accounting position at Johnstone & Custer Ltd.in Vancouver.He agreed to take the job if the company could find his family suitable housing in the vicinity of the company.After two months,and having been presented with 17 different "suitable" houses,Charles declared that the condition to the employment contract had not been met.Does the firm Johnstone & Custer have any legal claim on the employment contract?

Accepted Answer

This is a condition precedent where Char

Question 15

A enters into a contract with B under which A will sell to B 1000 barrels of fish for $8000.00.The contract provides that the risk passes to the buyer on delivery of the shipping documents.B pays a deposit of $1200.00 and A delivers five barrels of fish to B.Five days later A's warehouse is destroyed by an explosion caused by faulty repairs to a gas pipe.Under the modern Frustrated Contracts Acts,

Accepted Answer

A) A must still complete the contract because it has not been frustrated. 
B) B would get back his deposit less the value of the five barrels of fish delivered to him. 
C) B would get back his full deposit. 
D) all of the above 
E) none of the above 
A) A must still complete the contract because it has not been frustrated. 
B) B would get back his deposit less the value of the five barrels of fish delivered to him. 
C) B would get back his full deposit. 
D) all of the above 
E) none of the above

Question 16

Explain the effect of a condition subsequent.

Accepted Answer

Where a contract contains a co

Question 17

While travelling in the U.S.A. ,Joey bought some items at Payless Drug Store.The store refused to take in payment either Joey's Canadian currency or his personal cheque-saying they wanted U.S.cash or a major bankcard.Here we have a contractual issue of

Accepted Answer

A) payment using credit. 
B) tender of performance. 
C) discrimination against Canadians. 
D) exchange rates and value of currency. 
E) discharge by performance. 
A) payment using credit. 
B) tender of performance. 
C) discrimination against Canadians. 
D) exchange rates and value of currency. 
E) discharge by performance.

Question 18

Julie was told by ComputerLand that if she were to purchase 10 or more USB keys,she would receive a free USB hub in the mail.However,shortly thereafter,the supplier of such hubs went out of business and could no longer fill orders.Then Julie sued ComputerLand,who used "frustration" in its defence.Which of the following is true?

Accepted Answer

A) Frustration is impossible because it is too late for rescission. 
B) The manufacturer of the USB keys and hubs would be liable. 
C) Since the source is destroyed,the agreement is frustrated. 
D) Since Julie did not specify the source,the agreement is not frustrated. 
E) Since the carrying case is free,this agreement lacks consideration. 
A) Frustration is impossible because it is too late for rescission. 
B) The manufacturer of the USB keys and hubs would be liable. 
C) Since the source is destroyed,the agreement is frustrated. 
D) Since Julie did not specify the source,the agreement is not frustrated. 
E) Since the carrying case is free,this agreement lacks consideration.

Question 19

Where an event makes performance of a contract more difficult or may mean that it may take a little longer,the event is still a frustrating event.

Accepted Answer

A) True 
 B)False

Question 20

Accord and satisfaction is an agreement not to proceed with the performance of a contract already in existence.

Accepted Answer

A) True 
 B)False

Exam 12: The Discharge of Contracts

What is the effect of frustration on a contract? What,at common law,happens to a deposit paid prior to a contract being frustrated?

In material alteration,

A party to a contract might forego the defence of frustration by

A unilateral contract is discharged by performance when

Since any possible frustrating event can be made a term of the contract,why do we need the doctrine of frustration?

A sells goods to B for $5000.00 and no deposit is paid.Before the balance of the goods is delivered,the goods are destroyed.In this case,at common law,explain whether the seller will get anything for the value of the goods delivered.

A truck slides off a mountain road in a snow storm.The contents,Nike shoes,are spread all over a ravine far below.Explain how the seller of the goods,who retained title,might use frustration in his defence.

A novation agreement respecting a party or parties is only effective if

For a contract to be fully discharged,one party must complete performance.

A company that installs heavy equipment is to be paid upon the completion of each stage in the tooling of a new factory.Yet it is the factory owner's own chief engineer who does the inspection and makes the approval of each stage.Will the courts enforce this arrangement as a condition precedent?

Explain the effect of a condition subsequent.

While travelling in the U.S.A. ,Joey bought some items at Payless Drug Store.The store refused to take in payment either Joey's Canadian currency or his personal cheque-saying they wanted U.S.cash or a major bankcard.Here we have a contractual issue of

Where an event makes performance of a contract more difficult or may mean that it may take a little longer,the event is still a frustrating event.

Accord and satisfaction is an agreement not to proceed with the performance of a contract already in existence.

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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