Exam 18: Performance, Breach and Discharge

Monumental,Inc.contracts with Champion Builders to erect a three-story office building on a parcel of land it has purchased.Before construction begins,the local zoning board changes the zoning of the parcel and those adjoining it to residential use only.Monumental's contract with Champion is discharged.

Linda agrees to buy Missy's Greyhound race dog for $2,000.Linda is to deliver the money and take possession of the dog the next morning.That night,running his best race ever,the dog runs away from Missy,never to be seen again.What will be the outcome in this case?

Statutes of limitations

What is the key to all conditional clauses?

In negotiating the purchase of a vehicle,the sales representative told Karla,"I guarantee that you will be personally satisfied with this car." The guarantee was written on the contract when Karla purchased the car.If a controversy arises over Karla's satisfaction,the court will apply a subjective standard,which means Karla's judgment must be reasonable.

In January 2014,Professor Noe entered into a contract with State University.She agreed to teach full time during the 2014-2015 academic year.Professor Noe died on May 31,2014.Her estate

The statement,"You will have a job with Snelling & Snelling as long as you complete your degree in business administration this May" does not create a condition because it does not include the phrase "provided that."

What does the term "substantial performance" mean? What factors are generally considered when determining whether one of the parties has substantially performed?

M & E contracted to sell 500 music stands to Coda,Inc.M & E shipped the stands in accordance with the agreement.Coda paid for the stands as promised.The contract between M & E and Coda is discharged by

Identify four factors courts consider in deciding the validity of commercial impracticability and frustration of purpose claims.

Al contracted to sell his house to Bev.Subsequently,they both changed their minds and agreed to cancel the contract.The contract between Al and Bev is discharged by

Sam enters into a contract agreement to buy Betty Lou's house on the condition that he is able to secure financing at or below 6% per year.This is a

Abdulla hired Granite Construction to build an addition onto his home.Granite Construction dug the foundation but then abandoned the project.Granite Construction is entitled to receive the full contract price minus the value of the defects.

Generally,neither a "time is of the essence" clause nor a "force majeure" clause will be recognized by the courts because these types of clauses are seen as a violation of public policy.

Southern Fuels Co.and Langham-Hill Petroleum,Inc.are both in the business of buying and selling large quantities of petroleum products.In October,the parties entered into a fixed price contract wherein Southern agreed to purchase 4.2 million gallons of No.2 fuel oil at a specified price per gallon to be delivered in four monthly installments.The contract included a force majeure clause.The first three monthly shipments of oil were purchased by Southern as agreed.In January of the next year,the price of oil in the world market collapsed as a result of Saudi Arabian attempts to regain its share of the world oil market.Southern refused to purchase the last shipment under the contract.Southern informed Langham-Hill that because the drop in world oil prices was caused by Saudi Arabians who were "outside Southern's control" that it was invoking the force majeure clause.Langham-Hill sued for damages in the amount of $306,075.What is a force majeure clause? Southern's basic argument is that it can now buy oil at a substantially lower price.Will Southern succeed on this basis?

Alice signs a contract with Bob to buy Bob's house for $150,000,with the clause,"if I am able to obtain a mortgage loan for $125,000,at no more than 7% interest,payable over 15 years." Assume that Alice tries but is unable to obtain the described loan,and therefore refuses to proceed with the purchase.Alice is in breach of the contract.

Mary contracted to buy 100 table lamps.Under the terms of the agreement,Mary is to pay for the lamps upon delivery.This is an example of

Dana hires Paris to paint a portrait of her poodle,"Mack." The painting is to be done to Dana's personal satisfaction.Upon completion of the painting,which of the following will be true?

Dodger bought an insurance contract from Liberty Farm Co.The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred.Time is stated to be of the essence.Dodger sustained a covered farm loss,but did not report it to Liberty Farm until 50 days later.Liberty Farm denied coverage for the claim.If Dodger sues,who wins?

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years.As part of the remodeling,it is installing a new sound system.The sound system is to be installed by Sound Systems,Inc.on or before April 10.Opening night of the hall is May 1.The contract states that "time is of the essence" because of the opening-night deadline.Sound Systems has some financial difficulties and doesn't deliver the system until April 20.Grand Hall refuses to accept it,and Sound Systems sues.What will be the result?