Exam 14: Breach of Contract and Remedies

Vince agreed to paint Jen's house for $4,000, inside and out. Normally, it would have cost Jen $6,500 but Vince 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 Vince had painted everything except the kitchen ceiling, Matt asked him to go on a fishing holiday with him, and Vince, who was rather irresponsible, decided he had had enough painting. He left a note for Jen 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?

Princess Alicia hires Renaldo, the artist, to paint her portrait. The two disagreed. Renaldo said, "I'm done!" He left the palace. What did Renaldo's actions constitute?

Mardo, a brilliant cloth designer, contracted to work for Texture, a textiles company that is world famous for its superb materials. A clause in the employment contract says Mardo will not work for anyone else but Texture for the five-year period of their contract. Shortly after starting to work for Texture, Mardo realizes she has always wanted to be a doctor and that, if she does not start soon, she will never achieve her goal. Texture refuses to let her out of the contract and points out that she has promised not to work for anyone else but them. Mardo leaves anyway. Discuss whether Texture can get an injunction to stop Mardo working as a cocktail waitress while she puts herself through medical school.

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery. Since this is a breach of a condition of the contract, Benny is released from any obligations he has under the contract, and the contract is at an end.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception. The deposit, which was the only money paid to that point, was returned by courier the next morning without comment. If, because they had received a week's notice, Dev and Rabinda were able to hire Cameron Caterers and that had cost $10,000 instead of the $7,000 which Guthrie would have charged, Dev and Rabinda would be able to get $10,000 damages from Guthrie.

Antoine, a bush pilot, agrees to ferry an exploration crew from Gamma Oil to a remote part of Alberta in his helicopter, and to retrieve them a month later. Three weeks into the bush, the Gamma team learn through listening to local radio chatter on their short-wave radio that Antoine has sold his helicopter to a pilot in New Brunswick. In any future dispute over the situation, Gamma's position will be that Antoine's actions constituted anticipatory breach.

In rare cases, where monetary damages would be an inadequate compensation for breach of contract, the courts may decree an order of specific performance of the contract. How does this differ from an ordinary monetary judgement?

Andrew, a carpenter, entered into a contract with Steven for the construction of a garage on Steven's property for $5,000. Andrew had constructed the entire garage except for a small door, when he refused to complete the contract. Andrew 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.

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery. If Benny really wanted the pies and felt that Marnie would be able to meet her commitments, he could choose to treat the breach of condition as if it were a breach of warranty.

Catherine agreed to purchase franchise rights from a hamburger restaurant chain to open her own restaurant. Her deposit on the transaction was $10,000 against a final price of the rights at $750,000. The contract contained a term, of which Catherine was aware, that the deposit would be forfeited if she did not follow through on the deal. Early on in the process, Catherine could not obtain ownership of the site upon which she intended to construct her restaurant and was forced to back out. The hamburger chain refused to return her deposit. The most correct statement below is:

Mario, a professional entertainer, entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre, and to perform 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. The monetary amount which Barnum would be entitled to receive as compensation from Mario would be the amount of the loss that Mario could reasonably have foreseen at the time that the contract was entered into by the parties.

You are the president of Haverland Fruit Company, and you ended negotiations with Western Jam and Jelly Co., having been highly insulted by the WJJ bid for Haverland strawberries at $12,000 per 10,000 baskets. Just before the harvest you found a buyer in Anderson Bakeries at $30,000 for the baskets, but once the trucks had been loaded and sent off, word arrived that Anderson would refuse the shipment as it had been shut down by a strike. The berries will rot in two more days on the trucks. The WJJ President is now on the phone to you with an offer of $8,500 for the berries. What do you do, in what order, and what principles of law are in play?

Antoine, a bush pilot, agrees to ferry an exploration crew from Gamma Oil to a remote part of Alberta in his helicopter, and to retrieve them a month later. Three weeks into the bush, the Gamma team learn through listening to local radio chatter on their short-wave radio that Antoine has sold his helicopter to a pilot in New Brunswick. Antoine is in breach of contract.

Petra agreed to purchase franchise rights from Valley Cream Inc. to sell VCI ice cream from small trucks in a large metropolitan area. Her deposit on the transaction was $15,000 against a final price of the rights at $40,000. The contract contained a term, of which Petra was aware, that the deposit would be forfeited as liquidated damages if she did not follow through on the deal. Early on in the process, Petra could not get the financing she needed, and was forced to back out. Valley Cream, whose file contained only the copy of the agreement, refused to return the money. The most important part of Petra's Statement of Claim will be that relating to