Exam 9: The End of the Contractual Relationship

Adams signed a contract in which he promised to sell his house to Jefferson for $225,000. The "deposit" to be paid was set at $4,000, and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract. The buyer did breach the contract. Because the cost of housing was falling, it was difficult, even after a reasonable time had passed, to find a new buyer. The highest offer was $218,000. Adams accepted. Which of the following is true with regard to Adams's remedies?

Sam entered into a contract for the purchase of a used dump truck from "Joe's Heavy Duty Trucks." The written contract clearly specified, among other things, that "it shall be a warranty for this contract that the truck has the capacity of carrying and properly dumping loads of up to 4,000 kg of gravel." In fact, when Sam loaded the truck with 4,000 kg of gravel, he discovered that the hoist on the truck was not capable of dumping it. Only if the load was reduced to 3,000 kg could the gravel be dumped. Sam obtained an estimate stating that it would cost $8,000 to reinforce the hoist mechanism of the truck so that it could handle the dumping of 4,000 kg of gravel. When Sam approached Joe demanding satisfaction, Sam pointed out another term of the agreement that stated that in the event of a breach of contract the "maximum damages payable to the purchaser are limited to $5,000." Sam sued. Which of the following statements is correct with respect to the legal position of the parties?

In Meditek Laboratory Services Ltd. v. Purolator Courier Ltd., a Purolator employee delivered equipment to the wrong address and then falsified documents. In a subsequent lawsuit, Purolator relied on an Exemption clause that limited its liability "whether or not from negligence or gross negligence". What properly describes the outcome in this case?

What is the result of a breach of a significant term of a contract where there is a minor failure to perform?

Joe owed Harry $500, but Harry was confused when Joe came to pay it back and refused to take the money for the payment. Explain Joe's legal position.

Which of the following is true with regard to remedies for breach of contract?

Victims of breach have a duty to mitigate damages, meaning they must do what the can to keep those damages as low as possible.

Explain the limitations on the ability to request and receive equitable remedies in breach of contract cases.

Mable grew a field of corn and agreed to provide 300 ears of corn to Jan's Produce in the months of August and September. Unfortunately, her crop was destroyed by hail and she was unable to make the delivery. Jan sued for breach of contract. Discuss the likely outcome.

Which one of the following does not terminate a contract?

A condition precedent is an example of a contract being ended by agreement.

Joe agreed to buy a car from Sam at Sam's Used Car Lot for $10,000 with a $100 deposit. The next day, before he took delivery, he changed his mind and refused to go through with the deal. Sam kept the deposit and sued Joe for breach of contract. Indicate what kind of remedy he would be entitled to.

Which of the following is true with regard to ending a contract by performance, agreement, or breach?

A term in a contract that says that, on the occurrence of an event, the parties' obligations will end is an example of

Monroe sold computers. On the purchase of a new IBM computer the buyer signed the written contract that contained the following clause: "The seller is not liable for any breach of condition or warranty express or implied in this contract." The buyer was a businessman who intended to use the machine in his business for a while and then resell it. The machine was used properly but didn't operate well, and within one week it would not work at all. Monroe refused to take back the machine or to refund any money by relying on the exemption clause. Which of the following would be the buyer's best argument for avoiding the effect of the exemption clause in this case?

Cleo entered into a contract with Harvey in June to redecorate his apartment before Christmas. However, in the middle of October, she informed him that she would not be able to do his job because she had been offered a big contract in Japan that would take her away until spring. Which of the following is true with respect to this situation?

Alan entered into a written contract for the purchase of a house owned by Joe . But as the time to move approached, Alan discovered that Joe was refusing to move out and refusing to transfer the property. Apparently a dissatisfied customer had driven through the showroom window of Joe's new car dealership causing him considerable expense. Joe could no longer afford to purchase the new luxury home in Langley to which he had intended to move. Which of the following is the appropriate remedy in these circumstances for Alan, who really wants the house?

In the case of an anticipatory breach

A breach of warranty will bring the contract to an end.

What is a "force majeure clause"?