Exam 12: The Discharge of Contracts

Jack agrees to paint John's home for $500.00.Wishing to re-negotiate the deal,Jack,the night before the job,throws away his paint brushes and other equipment.The next day he tells John that thieves have stolen his equipment and so the contract will have to be cancelled.Jack's conduct is not a breach of the contract because the contract is frustrated.

The doctrine of frustration

When there is a contract for sale of goods,destruction of the source of the goods will frustrate the contract.

A and B enter into a contract whereby A agrees to supply B with 10 000 tins of tuna at the rate of 1000 tins per month from his tuna factory in Bayport,Nova Scotia,and B agrees to pay A $2 per tin.A supplies 1000 tins of tuna,but before he can collect,his factory is destroyed by fire.If the contract is discharged by frustration,which of the following statements is correct?

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?

The producer of a "musical on ice" show booked a large hockey arena for a local date.Immediately before the scheduled show the arena was destroyed by fire.The evidence disclosed that the cause of the fire was arson and the owner was to blame.The producer sued the owner for breach of contract to compensate for losses sustained as a result of having to cancel the skating show.What will the court likely decide?

A debtor who makes an unsuccessful but reasonable attempt to pay will be free from further liability on interest owing on the amount.

The general rule for the discharge of a contract through frustration is as follows.

In contracts for the shipment of goods,an act of God (the raging of the natural elements)may be a condition subsequent if it results in the destruction of the shipment.

A and B agree in writing that A will renovate B's house for $20 000.00.A renovates the house and B pays the money.In this situation

A contract provides for its own dissolution when there is

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

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

What is tender of performance,and why would a party to a contract make a tender of performance?

A has just hired B as his employee.The contract,which is in writing and for a two-year term,contains a provision that states that the first three months of B's employment is a probationary period during which A will determine whether B's employment will continue.At the end of the three-month period,A advises B that B's services are no longer required.In this case

The requirements of frustration with respect to an intervening event require all of the following EXCEPT

Jekyll agrees to sell Hyde a certain super-strength hair remover capsule.While it is still in Jekyll's laboratory,the only capsule is swallowed by a night-time guard dog.What will happen in this case?

At common law,in order for a contract to be discharged by frustration

A unilateral contract is discharged by performance when

Contracts can be discharged by agreement.Name and describe four examples of discharge by agreement.