Exam 16: Performance and Discharge

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.

Jennifer substantially performs her service contract with Gretchen.Due to Jennifer's failure to render complete performance,Gretchen:

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

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?

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:

In the O'Brien v.Ohio State University case,the court held that:

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

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?

Assume that Jessie and Lester have formed a contract whereby Jessie agrees to deliver 10,000 dozen "Grade A Large Eggs" to be shipped in recycled paper cartons.A shortage of paper makes paper cartons much more expensive,so Jessie uses styrofoam cartons and ships the eggs.Lester is entitled to cancel the contract based on this deviation of terms in the contract.

On February 15th,Mark,a farmer,contracts with Johnson's Fertilizers to have 80 gallons of a certain fertilizer delivered by March 31st.On March 15th,the Food and Drug Administration withdraws its approval of the said fertilizer because of a new study evidencing its risks.Mark's contract with Johnson is discharged.

Statutes of limitations:

If a condition does not occur:

The legal right to sue for a breach of contract is subject to a statute of limitations.

Ben enters into an agreement with Betsy to buy her lake cabin provided his application for a mortgage is approved.This is a:

Alamo Hotel contracted with First Furniture to purchase 500 black leather chairs for the conference rooms.The chairs are to be delivered on August 15.On July 20,First Furniture advises Alamo that,because of recent issues with wood suppliers,it will not be able to deliver the chairs.What can Alamo Hotel do?

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.

In the Strategic Resources Group v.Knight-Ridder,Inc.case,the court found that Knight-Ridder:

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:

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:

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.