Exam 7: Contracts: Ending Contracts

Accord and satisfaction is when the parties agree to end the contract on terms different than those in their contract.

Ken entered into a contract with Chris to haul gravel into his large tandem truck from Chris's gravel pit to a building site some three miles away distant, at $60 per load. Before Ken was to begin performance, his truck was destroyed in a serious traffic accident. Ken need not perform the contract as the contract was frustrated by the destruction of the truck.

Which of the following is not a legal remedy available in a breach of contract lawsuit?

Chris, a carpenter, entered into a contract with Doug for the construction of a garage on Doug's property for $5,000. Chris had constructed all of the garage, except the door, when he refused to complete the contract. Chris has substantially performed his part of the agreement, and would be entitled to payment of the contract price, less the amount necessary to finish the building.

Substantial performance is when the parties have completed all but a minor term of the contract.

A breach occurs when both parties fail to perform their obligations under a contract.

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city. At the end of the first week, Jane received a long distance telephone call from Helen, in which Helen advised Jane that she had decided not to sell the bicycle on her return. Jane was disappointed as a similar bicycle on the market would cost her at least $250. She decided to wait until Helen returned then urge her to go through with the sale. Before Helen reached home, her bicycle was stolen and never found. Helen's decision not to proceed with the sale was an express repudiation of the contract.

Canadian courts view an award of damages in a breach of contract as compensation.

A "balance of convenience" means that the courts will use the forum with the most substantial and real connection to the issue.

Mario, a professional entertainer, entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre and nowhere else during that period of time. A week after the agreement was signed, Mario entered into another agreement with a competitor of Barnum to perform at his opera house. Barnum is entitled to treat Mario's actions as a breach of his contract.

Derrick offered to purchase Perry's vehicle for $3,050 cash, with Perry to deliver the vehicle the next Wednesday, at which time Derrick would pay the $3,050. On the Wednesday, when Perry did not deliver, Derrick went to Perry's home, and found him in his garden. Derrick offered Perry the money, but Perry refused, saying that he had changed his mind, and did not wish to sell his automobile. If Derrick had offered Perry exactly $3,050 in cash, he had made a valid tender of performance.

Mr. Wicks, a plumber, had a contract to repair a slow leak in a toilet at Dr. Bone's medical clinic. Because it had to be done when no patients were there, Mr. Wicks agreed to come on a Saturday. However, when he got there, he found a notice on the door saying "Got a chance for a free trip to Hawaii. Come next Saturday at the same time. Thanks. Dr. Bone." Mr. Wicks did not turn up the next Saturday and, when Dr. Bone called to find out why, Mr. Wicks said that he had promised to take his wife shopping that day, and he doubted if he would be able to find the time in the future.

Dick agreed to paint Jane's house for $4,000, inside and out. Normally, it would have cost Jane $6,500 but Dick felt sorry for her because she was a single mother with four children and not much money, so he decided to give her a good deal. When Dick had painted everything except the kitchen ceiling, Arthur asked him to go on a fishing holiday, and Dick, who was rather irresponsible, decided he had done enough painting. He left a note for Jane saying "You've had more than your money's worth with what I've done already. I'll expect your cheque for $4,000 to be at my office when I return in two or three weeks." Which of the following statements is correct?

A person can be compensated for the loss of profit caused by a breach of contract.

A clause in a contract places a limit on the amount of damages due from a breach is a liquidated damages clause.

An unforeseen event making it impossible to perform a contract ends the contract by frustration.

Major terms that would normally be considered conditions cannot be stated as warranties in a contract.

Frustration occurs when an unforeseen outside event that makes the contract impossible to perform.

Frustration occurs when the operation of law makes performance of the obligations under the contract illegal.

An assignment into bankruptcy will not relieve a party from performance of a contract.