Exam 17: Performance and Discharge

Performance that provides a party with most of the benefits of a con?tract, in spite of a deviation from the terms, is substantial performance.

A promise to perform under a contract may be absolute.

When a condition operates to terminate a party's absolute promise to per?for?m, it is a condition precedent.

Quality Contractors contracts to build a warehouse for Retail Sales Company. Quality completely performs. Retail Storage is entitled to

Any breach allows the nonbreaching party to cancel the contract.

Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates. Lake Port's offer to perform, when Lake Port is ready, willing, able to do so, is

The formation of a substituted agreement that does not involve a third party is a novation.

Fact Pattern 17-A1 Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments. -Refer to Fact Pattern 17-A1. Neil's performance is most likely

Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 per?cent. Diners' best argument for avoiding payment to Eagle is that

The most common way to discharge a contract is by breach.

Dina contracts to repair a computer for Earl for $100. If Dina does not per?form, Earl must pay

Fact Pattern 17-A1 Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments. -Refer to Fact Pattern 17-A1. With respect to Mutual's duties, Neil's performance most likely

On April 1, KO Contractors, Inc., contracts to build a store for Lo-Cost Jewelry at a specific location in Metro City. On May 1, Metro changes its zoning laws to prohibit the construction of a commercial building at that location. Lo-Cost files a suit against KO. In this situation

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

Ruth contracts to provide Shelly with fifty hours of telepathic personal coaching. The state legisla?ture sub?sequently passes a law making tele?pathic personal coaching illegal. This law will

Tia signs a lease that states any change in the zoning law that affects the lease will cause its termination. Union City's zoning board adopts an affecting zoning classification. This adoption satis?fies

When a contract party alters a written contract, the other party must adapt his or her performance accordingly.

A promise to perform under a contract is never absolute.

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

A buyer's duty to pay becomes absolute once a contract is formed.