Exam 14: Breach of Contract and Remedies

Robin offered to sell her 10-speed touring bicycle to Felicia for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Felicia received a long distance telephone call from Robin,in which Robin advised Felicia that she had decided not to sell the bicycle on her return.Felicia was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Robin returned then urge her to go through with the sale.Before Robin reached home,her bicycle was stolen,and never found.Repudiation before the date fixed for performance is known as anticipatory breach.

Vince agreed to paint Jen's house for $4,000,inside and out.Normally,it would have cost Jen $6,500 but Vince felt sorry for her because she was a single mother with four children and not much money,so he decided to give her a good deal.When Vince had painted everything except the kitchen ceiling,Matt asked him to go on a fishing holiday with him,and Vince,who was rather irresponsible,decided he had had enough painting.He left a note for Jen saying "You've had more than your money's worth with what I've done already.I'll expect your cheque for $4,000 to be at my office when I return in two or three weeks." Which of the following statements is correct?

Hygrade Fruit Juice Co.entered into a contract with Citrus Suppliers Ltd.for the supply of orange concentrate for its juice production operation.The terms of the contract provided that Citrus would supply Hygrade with 1,000 cases of oranges at $10,per case one month hence,subject to a deposit of $4,000 on signing the contract and the balance on delivery.The contract further provided that in the event of breach or repudiation of the agreement by Hygrade,the deposit would be forfeited as liquidated damages.A week after the contract was signed,a senior representative from Hygrade was meeting with a broker from Citrus on a particular matter when their discussion degenerated into an argument that culminated with the representative from Hygrade saying "We've suffered along with your substandard product long enough.We've paid you too much in the past and are ruining the reputation of our juices.Are you getting this next shipment from the same source?" The citrus representative responded affirmatively."Then you can just stuff the next shipment." At that,the representative from Hygrade left. The fruit to be supplied to Hygrade was costing Citrus $5,000 from their source in Florida,USA.Taking the actions of Hygrade as repudiation,Citrus commenced negotiations with Cake & Cookie Co.for their purchase of the fruit.Cake & Cookie required the fruit for flavouring certain of their products,but certainly did not require high-grade fruit.As this was the case,regardless of the quality of Citrus's offering,Cake & Cookie was prepared to offer only $5,000 for the shipment to take it off Citrus's hands.At the time,other juice manufacturers for whom the fruit was suitable were offering $9,000 for a similar product.On learning of the impending sale between Citrus and Cake & Cookie,Hygrade immediately brought an action for an injunction against the sale and a return of their deposit,which they alleged was not liquidated damages.Citrus immediately filed an action against Hygrade in response,holding on to their $4,000 deposit and suing Hygrade for the $1,000 of lost profits that would have been generated by a sale to Hygrade.Discuss the arguments that will be raised by the parties,and render a decision.

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.An injunction is a discretionary remedy.

Awards which are not compensation of the plaintiff but rather punishment of the defendant for a breach of contract which is deceitful,malicious,or offensive to ordinary standards of morality are known as which kind of damages?

In which of the following cases will a court order specific performance of the contract? i.Gigantic Electrical Warehouse repudiates its contract with Video Co.to purchase 2,000 VCRs.The loss of this deal might push Video into bankruptcy. ii.Joan,a great opera singer,decides it is too far from New York to the National Arts Centre in Ottawa and so she will not perform at the sold-out concert there next week for which she had contracted months ago. iii.Mitsuko had a contract with Refined Galleries to purchase a small Rembrandt drawing,which Refined wants now to sell to a regular and very wealthy customer of theirs.They will not give Mitsuko the drawing. iv.John is refusing to perform a contract to sell his house to Eli.Eli has wanted to live in that house since he was a small boy. v.Eli is refusing to perform a contract to purchase John's house.John has another purchaser but her highest offer is $10,000 less than Eli's.

In the six months since Zippy Worldwide Courier bought a truck from the Solidbuilt Motor Co.,the truck has broken down constantly and has only been in use for a total of two weeks,never for more than half a day at a time.Zippy wants to return it and get a new truck,but Solidbuilt insists it is repairable.The contract has a replacement warranty clause for defective parts,and another clause says that only the warranties,conditions and other obligations set out in the contract are valid,and that all others,no matter how they might arise,have no force or effect. Discuss whether or not Zippy could get a court to permit them to rescind the contract.

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.The monetary amount which Barnum would be entitled to receive as compensation from Mario would be the amount of the loss that Mario could reasonably have foreseen at the time that the contract was entered into by the parties.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.There was an express repudiation of the contract when Guthrie failed to arrive when and where they should have.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.If,because they had received a week's notice,Dev and Rabinda were able to hire Cameron Caterers and that had cost $10,000 instead of the $7,000 which Guthrie would have charged,Dev and Rabinda would be able to get $10,000 damages from Guthrie.

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.Barnum may request the court to issue an injunction to prevent Mario from performing at the competitor's opera house.

Antoine,a bush pilot,agrees to ferry an exploration crew from Gamma Oil to a remote part of Alberta in his helicopter,and to retrieve them a month later.Three weeks into the bush,the Gamma team learn through listening to local radio chatter on their short-wave radio that Antoine has sold his helicopter to a pilot in New Brunswick.Should Antoine have failed to make arrangements for the extraction of the crew,he can successfully claim for half of his fee by virtue of the doctrine of substantial performance,and in fact his full performance of the first half of his obligation.

Ming was dismissed from his senior management position by his employer.He was very upset and said that "I'm going to fight this in court." he said.He did not look for another job.The court held that he had been wrongfully dismissed and said that the proper notice period was 6 months.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.If Guthrie had called a week before the wedding,this would have been a breach de minimis of the contract.

Antoine,a bush pilot,agrees to ferry an exploration crew from Gamma Oil to a remote part of Alberta in his helicopter,and to retrieve them a month later.Three weeks into the bush,the Gamma team learn through listening to local radio chatter on their short-wave radio that Antoine has sold his helicopter to a pilot in New Brunswick.If Gamma Oil arranges on its own for another helicopter to pick up the crew,it runs the risk of having to pay both the new pilot,and Antoine,should Antoine have made some alternative provision to honour his obligation to extract the crew.

In rare cases,where monetary damages would be an inadequate compensation for breach of contract,the courts may decree specific performance of the contract.How does this differ from an ordinary monetary judgement?

Paul ordered a motorbike from Moto-Haus.He had reviewed all the specifications and told the salesperson of his final choice.When the bike arrived,Paul found that it did not live up to the fuel efficiency that he expected or that was claimed in the brochure.He took the bike back to Moto-Haus,and demanded the return of his money,which was refused.Paul would be best advised to:

Andrew,a carpenter,entered into a contract with Steven for the construction of a garage on Steven's property for $5,000.Andrew had constructed the entire garage except for the small door,when he refused to complete the contract.Andrew has substantially performed his part of the agreement,and would be entitled to payment of the contract price,less the amount necessary to finish the building.

Mario,a professional entertainer,entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre,and to perform nowhere else during that period of time.A week after the agreement was signed,Mario entered into another agreement with a competitor of Barnum to perform at his opera house.The court may also order Mario to continue to perform at Barnum's theatre,because he had promised to work only for him.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.This was an implied repudiation since they did not contact Dev and Rabinda and actually tell them "We will not be catering your wedding."