Exam 13: The Discharge of Contracts

Jerry, a college business major, contracts with the Southwestern Co. to sell books door- to- door in Portsville, Ontario. Upon learning that a local by- law requires a $25 per day license, Jerry declared the contract frustrated and went home. Would the courts agree with Jerry's contention?

Regarding the discharge of a contract, which of the following is FALSE?

Explain why a waiver might not be enforceable.

Each province in Canada has a Limitations Act. Which of the following statements correctly describes what happens to a contract after the time set forth in the act has expired?

Your text gives five major ways to discharge a contract. Which of the following is NOT one of those ways?

A buyer makes a contract to buy property from a seller. Before completion (the date title transfers), the buildings on the property are destroyed by a fire set by a neighbour. The contract is discharged due to frustration.

Four partners own the used car dealership, Square Deal Ltd. The company needs 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 sign 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?

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

What is the difference between a condition precedent and a condition subsequent?

What is Tender of Performance?

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

Munson Fixtures Inc. has contracted with Weibe Installations to provide faucets for a major building project. The contract specifies that 400 Munson 6LS faucets (similar faucets are made by other manufacturers) shall be delivered on June 8th. Which of the following is the only situation where the contract might be discharged by frustration?

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 defense.

Briggs sells his personal business to Bye Sports Equipment who agrees to assume all the outstanding debt. One of the creditors refused to agree to this arrangement. How will this affect the contract of sale?

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 and what is Lucy Produce's best defense? What is the likely outcome of an action commenced by Lucy Produce for breach of contract?

A contract might be discharged by the Doctrine of Frustration if

A contract provides for its own dissolution when there is

On October 1st, Mary Miller, a world renowned entertainer, entered into a contract with Quality Production Ltd. to perform a concert in Sudbury on December 15th. On October 15th, Quality signed a contract to rent the Centennial Hall from its owners, Business Buildings Ltd. for the evening of December 15th. Business Bldg. was advised of the purpose for which Quality was renting the Hall and Quality paid Business Bldg. a deposit of $5,000. Quality had tickets printed, advertised the concert, hired a band, and paid Mary Miller a $7,500 advance. Expenses by December 10th, totaled $12,500 excluding the advance to Mary Miller. a. If on December 10th, the Centennial Hall burned to the ground through no fault of Business Bldg., would Quality be able to sue Business Bldg. for its losses and if so, what would Quality likely recover? Explain any legal principles and defenses the parties may rely upon. b. If on December 10th, the above (a) did not happen but Mary Miller died. Could Quality successfully sue Mary Miller's estate for damages and if so what would Quality likely recover? What legal principles and defenses would be available to the parties?

Jack sells Payless Habitat 750 hats. These are yet to be produced from a new factory in Centerville, Ontario. Delivery day on the contract is in six months. After the contract is entered into, the town of Centerville refused a conditional land permit necessary for the building of the factory. As it turns out, Jack will have to find another piece of land for his factory. Is Jack bound by his contract to supply hats? Give reasons for your answer.

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