Exam 7: Contracts: Ending Contracts

A clause in a contract that specifies the amount of damages due from a breach is a liquidated damages clause.

Statute law has modified the common law approach to allow recovery of losses that occurred from frustration.

A contract is discharged when each party has completed its obligations to the satisfaction of the other party.

Minor terms that would normally be considered warranties can be stated as conditions in a contract.

The equitable remedy of rescission restores the parties to their original position.

Which of the following type of contract does not have a duty of good faith in performance?

A clause in a contract that says the contract will end when a certain condition is not met is a condition precedent.

When you return an item you have purchased and get your money back your contract has been rescinded.

As a general rule, a contract must be fully performed before any payments are made. Which is an exception to this rule?

A condition is a minor term of a contract.

Repudiation before the date fixed for performance is known as anticipatory breach.

An indemnification clause is a promise by one party to pay for the damages incurred by another party when a contract is breached.

In March, Ken entered into an agreement with Bernadette whereby Ken would rent Bernadette his cottage for one week in July. In May earlier that same year, Ken negligently caused significant fire damage to the cottage while roasting marshmallows over a roaring fire in the cottage fireplace. As a result, the cottage was inhabitable for six months. Ken can successfully assert that this agreement is frustrated.

Major terms that would normally be considered conditions can be stated as warranties in a contract.

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

The contract between Bayson's Department Store and Clemson's Manufacturing contains a clause that allows either party to end the contract on 60 days' notice and the payment of liquidated damages, which are set at a reasonable amount. This clause is a(n):

A duty of good faith imposes a duty to loyalty on parties to a contract.

Novation is when a new party is substituted for one of the original parties with the consent of all the parties.

In the contract between Gamil's Building Materials store and Hightrees Logging and Lumber Company for the supply of lumber, there is a clause that allows either party to end the contract on 10 days' notice should actions of logging protesters on Hightrees property bring logging operations to a temporary halt. This clause is a(n):

Provincial consumer protection legislation provides clarity with e-contracts for a business to business transaction.