Exam 5: Performance and Breach of Contract

Joe's Jazz Quintet contracted with Larry's Lounge to provide music in the lounge each evening for a two-week period.The terms of the contract provided for payment of a weekly fee of $5,000 for Joe's services.During the course of the first week Larry sold the lounge to a group of investors who decided to convert it to a country and western line dancing bar.The new owners immediately terminated Joe's contract but paid the quintet the full weekly fee for one week even though only three performances had taken place. Joe's group had the opportunity to move on to its next booking early and did so,commencing performances the next evening.At the end of their touring season,some 10 months later,Joe and his musicians reflected on business matters that had transpired over the season.They realized that they had had to forgo one week's pay of $5,000 at Larry's Lounge and,even though they started their next job early,it had paid only $3,000 for the week.Moreover,Joe felt that it did not help the reputation of the band to essentially be "fired" from a job.Joe and his friends decided to get some advice about taking legal action against Larry or the new owners of the lounge for the damages they had suffered as a result of the termination of their contract.Identify the issues that their legal counsel would discuss with them about their claim.What arguments,if any,would Larry or the investors raise in response to Joe's action?

Sangster and Williams enter into a verbal contract with each other.They later decide to put it in writing.This is a substituted agreement.

Catherine agreed to purchase franchise rights from a hamburger restaurant chain to open her own restaurant.Her deposit on the transaction was $10,000 against a final price of the rights at $750,000.The contract contained a term,of which Catherine was aware,that the deposit would be forfeited if she did not follow through on the deal.Early on in the process,Catherine could not obtain ownership of the site upon which she intended to construct her restaurant and was forced to back out.The hamburger chain refused to return her deposit.The most correct statement below is

Lionel was wrongfully dismissed from his senior management position by his employer."I'm going to fight this in court," he said.He was upset because he felt that he had contributed more than any other senior manager and he focused on proving the employer wrong so he could get back his old job."Why should I look for anything else?" he said."They'll have to take me back." The court held that he had been wrongfully dismissed.There were lots of openings at the same level as his old job for someone with his skills.

Trendy Imports entered into a contract on June 1 with Neat Things,a small upscale gift shop,to supply it with 100 tooled-leather boxes.Delivery was to be made on September 15 so that the boxes could be on display in the store by October 15,ready for the pre-Christmas rush.On August 6,Trendy notified Neat Things that it seemed that a dock strike in Italy was holding up the shipment and,if the boat on which they were loaded could not leave port within a few days,Trendy would not be able to make the delivery on September 15. -Suppose Neat Things does nothing immediately,the boat sails,and the delivery would have been made on time,but the boat sinks in a hurricane on August 23.

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.

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. -The circumstances indicate express repudiation by Antoine.

Schloo offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds.Schloo and Baker signed a written purchase agreement that did not mention the fact that Schloo did not have the necessary funds in his possession. -The effect of a condition precedent is that the contract does not come into effect unless the condition is satisfied.

King,a library sciences student,was hired at $400 a week to catalogue the library of the very wealthy Earle family.He estimated that the work would be completed in early August,giving him a month of vacation that he felt he badly needed.For the first three days on the job,he was kept busy running errands for Mr.Earle,who had a sprained ankle,and keeping Mr.Earle from getting bored.On the fourth day,Mrs.Earle was using the library for her bridge club and a meeting of her church Flower Committee,and on Friday she kept King busy running errands for the dinner party she was giving that night.After two weeks of this,King quit and took a labouring job for $275 a week.

Doreen and Doris agree in writing that Doris will buy Doreen's cottage.If Doris changes her mind and refuses to buy the cottage,Doreen can get specific performance provided she can prove that she tried to transfer the title deed to the property on the closing date and Doris would not accept it.

Chris,a carpenter,entered into a contract with Doug for the construction of a garage on Doug's property for $5,000.Chris had constructed all of the garage,except the door,when he refused to complete the contract. -Chris 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.

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found. -Jane is entitled to claim damages for the difference in value between the agreed price and the price of a similar bicycle on the market.

Shortly after entering into a contract with Prentice Co.to provide consultation on integrating its office systems,Antonio discovers he is the victim of a neurological disease that will kill him very rapidly.Because of his situation and the excellent service he has provided the company in the past,Prentice's president decides to write off the whole of the $30,000 amount the company had advanced him which was to cover the investigatory and recommendation stages of his work for them,even though failure to perform was cause for rescission of the contract. A)Prentice's action is either a waiver or a release.Which is it and what is the difference between them? B)What danger does Antonio face if the president now leaves Prentice Co.and the new president reviews the matter? C)What should be done to protect Antonio from that problem,at the time the promise is made?

Helen offered to sell her 10-speed touring bicycle to Jane for $200 on her return from a two-week bicycle trip to a distant city.At the end of the first week,Jane received a long distance telephone call from Helen,in which Helen advised Jane that she had decided not sell the bicycle on her return.Jane was disappointed,as a similar bicycle on the market would cost her at least $250.She decided to wait until Helen returned then urge her to go through with the sale.Before Helen reached home,her bicycle was stolen,and never found. -Because Helen's bicycle was stolen,Jane is entitled to demand that Helen replace the stolen bicycle with a similar one,and sell it to her.

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile. -If Derrick had in his possession three $1,000 bills,and one $100 bill,his tender would be invalid,even though he had cash in excess of the amount requested.

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile. -Perry would be entitled to reject the tender of payment if it consisted of $3,100 in cash,instead of the required $3,050 in cash.

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.

Derrick offered to purchase Perry's vehicle for $3,050 cash,with Perry to deliver the vehicle the next Wednesday,at which time Derrick would pay the $3,050.On the Wednesday,when Perry did not deliver,Derrick went to Perry's home,and found him in his garden.Derrick offered Perry the money,but Perry refused,saying that he had changed his mind,and did not wish to sell his automobile. -If Perry refused the tender of the exact amount of money,Derrick would be entitled to take legal action against Perry for breach of contract.

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

Ken entered into a contract with Horst to haul gravel in his large tandem truck from Horst's gravel pit to a building site some three miles distant,at $60 per load.Before Ken was to begin performance,his truck was destroyed in a serious traffic accident. -Because Ken is bound in contract,Horst can require Ken to purchase a new truck to perform the agreement.