Exam 17: Performance And Discharge

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?

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:

Ron operates a garbage pickup business.He contracts to pick up garbage from an apartment complex for the next 52 weeks at a price of $150 per week.Unexpectedly,the landfill center where Ron takes the garbage to dispose of it,files for bankruptcy.As a result,Ron must travel an additional 100 miles to the nearest landfill center,turning Ron's expected profit into a loss of $40 per week.Ron's best argument in support of his petition to be discharged from the contract is:

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?

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