Exam 13: Performance of Contractual Obligations

In the contract between Canada Oil Company and the Government of Iran for the supply of Iranian crude oil,there is a clause that allows either party to end the contract on declaration of war between Canada and Iran,or the imposition of United Nations trade sanctions on either country.This clause is

Bacall,a building contractor,bid for and won the tender to construct Klegman's Shopping Centre.Due to rampant,unexpected inflation,she found she would not quite break even on the project and she asked Klegman to renegotiate the price.Klegman pointed out that there was no provision in the contract for that and said,"A deal's a deal."

Imperfect tender,also referred to as imperfect performance,does not represent a breach of contract.

A judgment by Mr.Justice Exx for the plaintiff Wy,in his suit against Zedd for breach of a condition of a contract,has the effect of discharging the contract,so that Wy has no further obligations under it,and substitutes the terms of the judgment for the terms of the contract,which Zedd must then perform.

Jamil,a prospective purchaser of real estate,visited his lawyer with three completely executed agreements of purchase and sale,each for a different piece of real estate.Each offer was conditional upon "the purchaser being able to obtain $50 000 financing to his satisfaction within ten days at a rate of interest not exceeding 10%,failing which this offer is void." Financing of this type was easily available,over the counter,from any local bank for a person of Jamil's financial circumstances.Discuss the position that Jamil has found himself in,particularly if he should obtain such financing,informing one purchaser of his intention to proceed,and the other two that he could not obtain funds.

Lucas offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Lucas and Baker signed a written purchase agreement which did not mention the fact that Lucas did not have the necessary funds in his possession.The proviso "if he could arrange a loan with the bank for the funds" would be a condition precedent.

The effect of a condition precedent is that the contract does not come into effect unless the condition is satisfied.

Lucas offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Lucas and Baker signed a written purchase agreement which did not mention the fact that Lucas did not have the necessary funds in his possession.If the bank refused to lend Lucas the money,the contract would be enforceable against Lucas.

Lucas offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Lucas and Baker signed a written purchase agreement which did not mention the fact that Lucas did not have the necessary funds in his possession.If Baker claimed against Lucas for breach of the contract,Lucas could raise the agreement concerning the need for a bank loan as a collateral agreement,allowing him to avoid the contract.

The University of Excellence has decided that it wants to only accept cash payments for tuition.Its current contract states that payment may be made by cash,cheque or credit card.How can it amend the contract?

Cecilia agreed to buy an antique Japanese sword from Andrew.After the contract is formed but before Andrew delivers the sword or Cecilia pays any money to him,the government passes a law that makes it a crime to buy a sword other than a fencing foil.Since the contract was made before the law was passed,it is not frustrated.

For contracts concerning the purchase of land,once payment in full in accordance with the terms of the contract has been offered by the purchaser,if not provided in turn by the vendor with a deed to the property,the purchaser may

Bronson signs up to join the army because the advertisements make it look like summer camp.Later,he changes his mind and shoots himself in the foot so he won't have to go.This does not frustrate the contract,though the contract may be avoidable on other grounds.

John Stevenson,a plumber,had a contract to repair a slow leak in a toilet in Dr.Ibsen's medical clinic.Because it had to be done when no patients were there,John Stevenson agreed to come on a Saturday.However,when he got there,he found a notice on the door saying "Got a chance for a free trip to Hawaii.Come next Saturday at the same time.Thanks.Dr.Ibsen." John Stevenson did not turn up the next Saturday and,when Dr.Ibsen called to find out why,John Stevenson said he had promised to take his wife shopping that day,and he doubted if he would be able to find the time in the future.

The vast majority of contracts are discharged by operation of law.

Carson,a fruit wholesaler,delivered bananas to Phil's Fruit Market.A sizeable portion of the truckload was of questionable quality,but no one at Phil's Fruit Market had objected to delivery.After a falling out over another contract a year later,Phil's Fruit Market sued Carson over the banana shipment.Of the following,Carson's best defence would be:

Shamira offered to purchase Brendan's automobile for $3,050 cash,with Brendan to deliver the vehicle the next Wednesday,at which time Shamira would pay the $3,050.On the Wednesday,when Brendan did not deliver,Shamira went to Brendan's home,and found him in his garden.Shamira offered Brendan the money,but Brendan refused,saying that he had changed his mind,and did not wish to sell his automobile.If Shamira had offered Brendan exactly $3,050 in cash,she had made a valid tender of payment.

Kirk entered into a contract with Yemmi to haul gravel in his large tandem truck from Yemmi's gravel pit to a building site some five kilometres distant,at $60 per load.Before Kirk was to begin performance,his truck was destroyed in a serious traffic accident.Kirk need not perform the contract,as the contract was frustrated by the destruction of the truck.

Delores is an opera singer who is scheduled to perform in Toronto on October 17^th.She gets laryngitis and is unable to sing.The contract does not include any provisions regarding Delores' health.Is she obliged to perform?

Kirk entered into a contract with Yemmi to haul gravel in his large tandem truck from Yemmi's gravel pit to a building site some five kilometres distant,at $60 per load.Before Kirk was to begin performance,his truck was destroyed in a serious traffic accident.If Kirk owned a fleet of trucks,and Kirk had a number of spare trucks,the doctrine of frustration would not apply to the case,and Kirk would be obliged to perform the contract.