Exam 18: Performance and Discharge

Fact Pattern 18-2 Flora, who owns and operates Garden Fresh Organic Farms, agrees to sell Harvesters Grocery a minimum quantity of fresh fruits and vegetables every week for three months. -Refer to Fact Pattern 18-2. If bad weather destroys Flora's crops, the obligation to deliver produce to Harvesters is

Rehab Center signs an agreement with Savers Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 percent. Rehab's best argument for avoiding payment to Savers is that

A condition is a qualification in a contract based on a future event that is certain to occur.

An express condition is often prefaced by the word if, provided, after, or when.

Home Construction LLC enters into a contract with Irene to build a house. Before Home starts to work, the market price for its services increases-in effect, Home will lose money by if it fulfills its contract with Irene. Home notifies her that it will not perform. Home's obligation to perform is

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to

Subjective impossibility of performance can discharge a contract.

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.

A contractual obligation may not be discharged through novation.​

Stephanie enters into a contract to work as a lifeguard at Tim's Water Park for the summer in exchange for a weekly paycheck and free admission to the park's attractions. If the duties under this contract are discharged like those under most contracts, the duties will be

Quinn contracts to provide ten tons of scrap steel at $500 per ton to Rendered Materials, Inc. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Quinn to fulfill the contract for less than $5,000 per ton. Quinn's best defense against performing the contract would be that

A contract comes to an end when both parties fulfill their respective duties by performing the acts they have promised.

Most contracts need to be performed only to the satisfaction of a reasonable person unless they expressly state otherwise.

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.

Dharma enters into a contract to manage the operations of Esther's dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

An intentional failure to comply with the terms of a contract is not a breach.

After a contract is made, a supervening event may make performance impossible and discharge the contract.

Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be

Courts may imply conditions from the purpose of a contract or from the intent of the parties.

A novation occurs when there is a substitution, by agreement, of a new contract for an old one, with the rights under the old one being terminated.