Exam 9: The End of the Contractual Relationship

Damages are an example of an equitable remedy.

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?

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

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?

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

What is the legal position of the victim of an anticipatory breach?

Rahilly entered into a contract with Khan,whereby Rahilly agreed to paint a portrait of Khan's wife to be completed by her 30th birthday,six months from the time of this agreement.Three months before the portrait was to be completed,Rahilly told Khan that he would not be doing the portrait because he had accepted a job in Boston and was leaving immediately.Which of the following is false with regard to the rights of the parties in this situation?

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

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

Joe was a student at the local college and agreed to paint Harry's house during the Easter Break.A month before that time,he informed Harry that he had an opportunity to go to Hawaii and that he wouldn't be painting the house.What can Harry do in these circumstances?

Gill,a wholesale fish seller,agreed to provide Blanchet's Restaurant with 1000 pounds of fresh salmon per week throughout the months of July,August,and September.Things went as planned for July and August.However,Gill was unable to meet the requirements of the contract for the first two weeks of September because his boats simply did not catch that much,although other companies did better and other fish was available for Gill to purchase,but at a higher price than what Blanchet was paying him.Rather than sell at a loss,Gill simply did not supply during the two-week period.At the end of that period,the Federal Fisheries Department shut down the fishery altogether because of the depletion of fish.After that,no more fresh salmon was available at all.Blanchet sued Gill for breach of contract with respect to his failure to deliver any fresh salmon in September.Which one of the following statements accurately sets out the legal situation here?

What is the three-part test for determining if novation has occurred?

Ellis agreed to paint Lee's house for $1500.A month before the performance was due,Lee called and told Ellis that she had changed her mind and was going to have her house stuccoed instead.Ellis insisted that they had a contract and that he was going to paint the house anyway.Lee repeated that she was not going to go through with it,but Ellis insisted the contract was still on.Before further steps could be taken by either party,Lee's house was destroyed by a freak airplane accident.Which one of the following statements describes the law applicable to these facts?

For a contract to be frustrated,performance must be impossible.

In all but one of the following situations,the contract is frustrated.Identify the exception.

Explain the principle of mitigation in contract law.

A person who breaches a contract is responsible for all of the loss that flows from the breach,no matter how unforeseeable.

Sam entered into a contract for the purchase of a used dump truck from Joe's Heavy Duty Trucks.The written contract clearly specified,among other things,that "it shall be a warranty to this contract that the truck has the capacity of carrying and properly dumping loads of up to 4000 kg of gravel." In fact,when Sam loaded the truck with 4000 kg of gravel,he discovered that the hoist on the truck was not capable of dumping it.Only if the load was reduced to 3000 kg could the gravel be dumped.Sam obtained an estimate stating that it would cost $8000 to reinforce the hoist mechanism of the truck so that it could handle dumping 4000 kg of gravel.When Sam approached Joe demanding satisfaction,Sam pointed out another term of the agreement that stated that in the event of a breach of contract the "maximum damages payable to the purchaser are limited to $5000." Sam sued.Which of the following statements is correct with respect to the legal position of the parties?

The principle of substantial performance can best be described as when

A condition subsequent is an example of a contract being ended by agreement.