Exam 18: Contract Termination

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years. As part of the remodeling, it is installing a new sound system. The sound system is to be installed by Sound Systems, Inc. on or before April 10. Opening night of the hall is May 1. The contract states that "time is of the essence" because of the opening-night deadline. Sound Systems has some financial difficulties and doesn't deliver the system until April 20. Grand Hall refuses to accept it, and Sound Systems sues. What will be the result?

Most contracts are discharged by mutual agreement of the parties.

Ron operates a garbage pickup business. He contracts to pick up garbage from an apartment complex for the next 52 weeks at a price of $150 per week. Unexpectedly, the landfill center where Ron takes the garbage to dispose of it, files for bankruptcy. As a result, Ron must travel an additional 100 miles to the nearest landfill center, turning Ron's expected profit into a loss of $40 per week. Ron's best argument in support of his petition to be discharged from the contract is

Dodger bought an insurance contract from Liberty Farm Co. The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. Time is stated to be of the essence. Dodger sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later. Liberty Farm denied coverage for the claim. If Dodger sues, who wins?

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities. The festivities were unexpectedly canceled because of concern over a terrorist attack. Harry is

A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month because of recent price increases in coffee. The retailer may treat the wholesaler as having breached the contract and sue for damages even though the wholesaler's performance is not due until next month.

The statement, "You will have a job with Snelling & Snelling as long as you complete your degree in business administration this May" does not create a condition because it does not include the phrase "provided that."

The legal right to sue for a breach of contract is subject to a statute of limitations.

Identify the factors courts consider in deciding the validity of commercial impracticability and frustration of purpose claims.

Sea Rovers, Inc. contracted to sell 1,000 pounds of shrimp to the Seafood Shack with delivery on June 1. On May 1, Sea Rovers advised the Seafood Shack that it would not be able to deliver the shrimp. The Seafood Shack

Alice signs a contract with Bob to buy Bob's house for $150,000, with the clause, "if I am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable over 15 years." Assume that Alice tries but is unable to obtain the described loan, and therefore refuses to proceed with the purchase. Alice is in breach of the contract.

When one party breaches a contract, the discharged party

In January, All Seasons, Inc. ordered $4,000 of fireworks from Kaboom Ltd. with delivery to be on or before June 1. On April 15, Kaboom notifies All Seasons that it will not be able to perform the contract as agreed. How will the law characterize Kaboom's actions? Does All Seasons have to wait until June 1 before buying fireworks from another supplier?

Statutes of limitations

M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by

Assume that Jessie and Lester have formed a contract whereby Jessie agrees to deliver 10,000 dozen "Grade A Large Eggs" to be shipped in paper cartons. A shortage of paper makes paper cartons much more expensive, so Jessie uses styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on a material breach of the contract.

What does the term "substantial performance" mean? What factors are generally considered when determining whether one of the parties has substantially performed?

Melody is a recent graduate of State Law School. She lands an impressive employment contract with the firm of Dewey, Cheathem, and Howe, Attorneys at Law, on the stated provision that she pass the upcoming bar exam. This provision in the employment agreement is a(n)

In January 2018, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2018-2019 academic year. Professor Noe died on May 31, 2018. Her estate

A court may, at times, discharge a party who has not performed.