Exam 11: Discharge and Breach

In some circumstances, the innocent party will not be able to discharge a contract, regardless of whether the other party breached a condition, a warranty, or an intermediate term.

Depp Designs Inc is a landscaping and topiary company.Roger owns a house that is surrounded by various types of shrubbery.He entered into a contract with Depp under which the company was required to sculpt the various shrubs into the shapes of dogs.Because of an error, however, Depp actually sculpted the shrubs into the shapes of cats.Which of the following statements is TRUE?

Because consideration is not received in return, a waiver of contractual rights is effective only if it is placed under seal.

Green Thumb Inc contractually agreed to provide a "complete lawn care package" to Benjamin. The parties' contract required the company to perform a long list of tasks on a weekly basis during the summer months.While the company performed most of those tasks flawlessly, Benjamin was very upset to discover that one of his seven small flower beds had not been weeded one week.The company explained that the task had been overlooked by an employee during her first week on the job, and offered to extend their services one week into the fall season free of charge.Because he had come to regret entering into the contract in the first place, Benjamin rejected the company's explanation and offer.He announced instead that he was "terminating" the contract and that he no longer would allow company employees on his property.Which of the following statements is most likely to be TRUE?

Identify a situation in which a party is entitled to have a contract discharged on the basis of performance, even though that performance constitutes a breach of the contract.

Which of the following rules applies with respect to a tender of payment?

Which of the following statements is TRUE?

AJ contractually agreed to repair Shirley's car within one week.Three days later, however, he informed her that he would not be able to complete the job because he had lost all of his tools in a poker game.The facts most clearly demonstrate the concept of

Boris purchased confidential information from Natasha for a price of $100 000.Under the terms of that contract, he was required to pay $5000 on the first day of each month for twenty consecutive months.He was also required, on the first day of each month, to pay 7.5 percent interest on the total amount of the debt that was outstanding.After paying $5000 plus interest for the first month, Boris explained to Natasha that he had suffered a financial setback in his other business ventures.He therefore asked if she would be willing to relieve him of the need to pay interest in the future.Which of the following statements is TRUE?

Alpha Corp breached its contract with Beta Inc.If Beta discharges the contract on the basis of that breach, the contract no longer will be at all relevant to the relationship between the parties.

Which of the following statements is TRUE with respect to a contractual obligation that is discharged through payment by a debit card?

Identify two policy reasons why contractual rights may become unenforceable under a statute of limitation.

Pavel agreed to build a yacht for Dixie.The yacht was to be delivered to Dixie on July 15 and Pavel was to be paid the total price of $100 000 on the same day.Which of the following statements is TRUE?

The existence of intermediate terms is best explained by the fact that

Morgan acquired a credit card for Usury Unlimited Inc (UUI).While on vacation, Morgan used his card to purchase $25 000 soapstone sculpture by a famous Inuit artist.When he arrived home and had the piece appraised, however, the expert told Morgan that the sculpture was fraud, that the artist was unknown, and that the piece was worth $500 at most.Which of the following statements is most likely to be TRUE?

Hector agreed to apply three coats of paint to the exterior of Ruth's house.Although he only applied two, the evidence indicates that a third coat was really unnecessary.Hector nevertheless has breached the contract.

Explain why a breach of contract supports the right of discharge in some situations, but not others.

ABC Corp and XYZ Inc entered into a contract that is subject to a condition subsequent.In order to determine whether or not the parties' agreement will come to an end as a result of that condition, it is necessary to determine whether or not either party has been substantially deprived of the expected benefit of the contract.

Which of the following sets of concepts (as discussed in Chapter 11) represent ways in which the terms of a contract can be varied without the supply of fresh consideration?

Woogles Inc manufactured widgets in Winnipeg.It contractually agreed to sell 5000 widgets to Peja in Halifax for a price of $100 000.Because the Province of Manitoba is concerned about the export of widgets, it requires all such sales to be licenced.Such licences are easily obtained if the seller fills out a simple application form.Because of that requirement, the contract between Woogles and Peja contained a clause that said, "Performance of this agreement is conditional upon the acquisition of an export licence." Shortly after entering into its contract with Peja, Woogles received an offer from another buyer, who was located within Manitoba, to pay $125 000 for 5000 widgets.Woogles accepted that offer, even though it only had a total of 5000 widgets to sell.It then simply refused to apply for the export licence that was necessary for its contract with Peja.Can Woogles escape all responsibility to Peja in that way? Explain your answer.