Exam 16: Performance and Discharge

Most contracts need to be performed to the personal satisfaction of each contracting party.

Only contracts that have been fully executed can be rescinded by agreement.

A contract promise that is absolute must be performed, or the party who made the promise will be in breach.

When the subject matter of a contract is personal, the performance need only satisfy a reasonable person.

There is no difference between complete and substantial performance.

A seller who places goods at the disposal of a buyer has tendered delivery but cannot yet demand payment.

Gina enters into a contract to buy a commercial building from Hope for a certain price subject to an appraiser's evaluation of the structure's condition. If the appraiser deems the condition to be substandard, the parties' obligations will be

Gliders, LLC, and Hang Time, Inc., are parties to a contract. They subsequently agree that In the Wind Inc. should take Gliders' place and assume all of its rights and duties under the contract. This is

Security Company enters into a contract with Tower Apartments to deliver and install an alarm system for a certain price. Both parties perform the acts as promised. The contract is

Any breach discharges the breaching party from the contract.

Fern, who owns and operates Garden Farm, agrees to sell Harvest Grocery a minimum quantity of fresh fruits and vegetables every week for three months. If bad weather destroys Fern's crops, the obligation to deliver produce to Harvest is

Gil agrees to buy Howe's Bakery on the express condition that the bakery's suppliers extend the same credit terms to Gil that the suppliers currently extend to Howe. This approval is

Floors n' More, Inc., hires Gordon to renovate Floors n' Mores showroom. Gordon submits plans that Floors n' More approves. Gordon completes the major reconstruction, paints the interior, and buys the fixtures and furnishings. Floors n' More rejects some of these items because they do not match the plans, and subsequently refuses to allow Gordon to finish the work or to collect payment. Could Gordon sue successfully for payment for the entire contract?

Concurrent conditions exist in a contract when each party's performance is conditioned on the other's performance.

Business Center signs an agreement with Credit Lending Inc. to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. The borrower's best argument for avoiding payment to the lender is that

Dairy Farm enters into a contract with Edible Ice Cream Inc. to supply milk. Later, Dairy decides that it is no longer advantageous to fulfill the contract and subsequently fails to perform as promised. Edible files a suit against Dairy. A breach occurred when Dairy

Anything less than complete performance is a material breach of contract.

Any breach of contract effectively excuses both parties from performing.

Contractual obligations will be discharged when the specific subject matter of the contract is destroyed.

New Builders, Inc., enters into a contract with O'Reilly to refurbish a garage on his property as an auto repair shop. O'Reilly's neighbor Pete challenges the project as a violation of the local zoning laws. A court orders a halt to the project. O'Reilly's contract with New Builders is