Exam 18: Contract Termination

Commercial impracticability means some event has occurred that neither party anticipated and fulfilling the contract would now be extraordinarily difficult and unfair to one party.

Generally, neither a "time is of the essence" clause nor a "force majeure" clause will be recognized by the courts because these types of clauses are seen as a violation of public policy.

Abdulla hired Granite Construction to build an addition onto his home. Granite Construction dug the foundation but then abandoned the project. Granite Construction is entitled to receive the full contract price minus the value of the defects.

The distinction between a condition precedent and a condition subsequent

Concurrent conditions arise when there is both a condition precedent and a condition subsequent.

The law strongly prefers to apply the objective standard to contracts because

An employment contract is an example of a personal satisfaction contract.

Southern Fuels Co. and Langham-Hill Petroleum, Inc. are both in the business of buying and selling large quantities of petroleum products. In October, the parties entered into a fixed price contract wherein Southern agreed to purchase 4.2 million gallons of No.2 fuel oil at a specified price per gallon to be delivered in four monthly installments. The contract included a force majeure clause. The first three monthly shipments of oil were purchased by Southern as agreed. In January of the next year, the price of oil in the world market collapsed as a result of Saudi Arabian attempts to regain its share of the world oil market. Southern refused to purchase the last shipment under the contract. Southern informed Langham-Hill that because the drop in world oil prices was caused by Saudi Arabians who were "outside Southern's control" that it was invoking the force majeure clause. Langham-Hill sued for damages in the amount of $306,075. What is a force majeure clause? Southern's basic argument is that it can now buy oil at a substantially lower price. Will Southern succeed on this basis?

Mohammed suffers a substantial financial loss when Olson Company breaches a contract. Under the statute of limitations, to receive damages Mohammed must file suit against Olson Company within

A contract between a company in the United States and one in China contained a clause that stated: "If an event happens which is extraordinary and out of the control of the parties such as a strike, act of God, fire, accident, or transportation difficulties, then the affected party shall be relieved of its obligations under the contract." This type of clause is a(n)

Dana hires Paris to paint a portrait of her poodle, "Mack." The painting is to be done to Dana's personal satisfaction. Upon completion of the painting, which of the following will be true?

Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to pay for the lamps upon delivery. This is an example of a

Teresa tells her son Noah that she will give him her car when she finds a new job, provided that he get all As in his classes this semester. Teresa's finding a new job is __________, and Noah's grades are __________.

Ramon purchased 5,000 pounds of coffee from Quick Jump Coffee. The coffee was to be delivered on September 1. Since the contract included a date for performance, time is of the essence and the delivery date is strictly enforceable.

Which of the following events would have the best chance of excusing performance of a contract based on commercial impracticability?

Linda agrees to buy Missy's Greyhound race dog for $2,000. Linda is to deliver the money and take possession of the dog the next morning. That night, running his best race ever, the dog runs away from Missy, never to be seen again. What will be the outcome in this case?

Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation?

Buddy was hired to play drums for a rock group scheduled to tour the Midwest. Part way through the tour, Buddy was tragically killed in a plane crash. The tour had to be discontinued until a new drummer could be found. The band lost money on the tour. Is Buddy's estate or agent responsible for the loss to the band?

Monumental, Inc. contracts with Champion Builders to erect a three-story office building on a parcel of land it has purchased. Before construction begins, the local zoning board changes the zoning of the parcel and those adjoining it to residential use only. Monumental's contract with Champion is discharged.

What is the key to all conditional clauses?