Exam 9: The End of the Contractual Relationship

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause when the buyer suffers a loss?

Which of the following is False with regard to remedies for breach of contract?

Explain the principle of mitigation in contract law.

Which of the following statements regarding novation is False?

Dubocovich had contracted to supply a health-food store with jars of melatonin, a hormone reported in the media as a miracle potion. After they contracted, but before delivery, the government banned the sale of melatonin so that it could be properly tested under government auspices. Dubocovich told the owner of the store, Mr. Wei, that he wouldn't be delivering the melatonin because of the government ban. The demand for the melatonin was high. Mr. Wei was very upset with Dubocovich for failing to honour his contractual obligations. Furthermore, he had given Dubocovich $5000 in advance, which Dubocovich needed and used to pay the freight costs in bringing the drug to his warehouse. Wei sued Dubocovich for breach of contract. Which of the following is correct with respect to the legal position of the parties?

Which of the following is true with regard to ending a contract by performance, agreement, or breach?

Alan entered into a written contract for the purchase of a house owned by Joe. As the time to move approached, Alan discovered that Joe was refusing to move out and refusing to transfer the property. Apparently a dissatisfied customer had driven through the showroom window of Joe's new car dealership, causing him considerable expense. Joe could no longer afford to purchase the new luxury home into which he had intended to move. Which of the following is the appropriate remedy in these circumstances for Alan, who really wants the house?

Explain what is meant by an accounting as a remedy in contract law.

"For a contract to be frustrated, performance of the contractual obligation must be impossible." Discuss the accuracy of that statement.

Carson arranged with his brother-in-law, Waxman, that he would try to buy a famous old B.C. coastal airplane, the Spruce Ghost, which Waxman would then buy from him to display in his flight museum. Waxman promised to pay Carson a 10% commission over the price that Carson had to pay to buy the plane, so that their price would be 110% of Carson's purchase price. Carson and the owner, Wonka, agreed on a price of $80,000. After reconditioning the plane but before delivering it to Carson, Wonka decided to take it up for one last nostalgic flight and, because of his carelessness, he crashed it on take-off. Although Wonka escaped uninjured, the plane caught fire and was totally destroyed. Carson was able to locate a similar plane for only $60,000 but Waxman wasn't interested. Carson sued his brother-in-law and Wonka. What is the likely outcome of this suit?

On the theory that all land is unique, the courts in the past have been willing to award ________ whenever the parties to the purchase of land breached their contract.

Mable grew a field of corn and agreed to provide 300 ears of corn to Jan's Produce in the months of August and September. Unfortunately, her crop was destroyed by hail and she was unable to make the delivery. Jan sued for breach of contract. Discuss the likely outcome.

The courts will grant an order of specific performance to compel performance of a contract for personal services.

The Frustrated Contracts Act today requires that when a deposit is paid, the costs incurred can be split out of the deposit.

Adams signed a contract in which he promised to sell his house to Jefferson for $225,000. The deposit to be paid was set at $4000, and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract. The buyer did breach the contract. Because the cost of housing was falling, it was difficult, even after a reasonable time had passed, to find a new buyer. The highest offer was $218,000. Adams accepted. Which of the following is true with regard to Adams' remedies?

Where one party refuses to perform his contractual obligations, what is the risk that the second party runs if he continues to press the first party to perform?

In awarding damages for breach of contract

If a supplier failed to honour a contract to supply parts to Mr. Matheson and the court finds the supplier in breach of contract, which of the following would be incorrect with respect to how the court determines the amount of money to award to Matheson?

Explain what restrictions are put on the effect of exemption clauses (sometimes referred to as exclusion or exculpatory clauses) in a contract.

In Meditek Laboratory Services Ltd. v. Purolator Courier Ltd., a Purolator employee delivered equipment to the wrong address and then falsified documents. In a subsequent lawsuit, Purolator relied on an exemption clause that limited its liability "whether or not from negligence or gross negligence." What properly described the outcome in this case?