Deck 5: Performance and Breach of Contract

Question 1

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 proviso "if he could arrange a loan with the bank for the funds" would be a condition precedent.

Answer 1

True

Question 2

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.

Answer 2

False

Question 3

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.

Answer 3

True

Question 4

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.

Question 5

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.
Barnum is entitled to treat Mario's actions as a breach of his contract.

Question 6

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.

Question 7

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.
Had the bicycle not been destroyed,Jane would be entitled to specific performance of the contract if Helen had refused to sell.

Question 8

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.
Ken need not perform the contract,as the contract was frustrated by the destruction of the truck.

Question 9

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.

Question 10

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.
If the bank refused to lend Schloo the money,the contract would be enforceable against Jones.

Question 11

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.
Barnum may request the court to issue an injunction to prevent Mario from performing at the competitor's opera house.

Question 12

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.

Question 13

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.
Repudiation before the date fixed for performance is known as anticipatory breach.

Question 14

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.
If Baker claimed against Schloo for breach of the contract,Schloo could raise the agreement concerning the need for a bank loan as a collateral agreement,allowing him to avoid the contract.

Question 15

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.
If Ken deliberately destroyed his truck,Horst can insist that he perform the agreement or compensate Horst for any loss that might result from Ken's non-performance.

Question 16

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.
If Ken owned a fleet of trucks,and Ken had a number of spare trucks,the doctrine of frustration would not apply to the case,and Ken would be obliged to perform the contract.

Question 17

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 offered Perry exactly $3,050 in cash,he had made a valid tender of payment.

Question 18

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.

Question 19

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.
Helen's decision not to proceed with the sale was an express repudiation of the contract.

Question 20

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 cannot recover anything from Helen for repudiation of the contract,because the contract was frustrated before the date fixed for performance.

Question 21

Bozo 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.

Question 22

Doreen and Doris agree in writing that Doris will buy Doreen's cottage.On the date set for closing the sale,it is up to Doris to come to Doreen to make payment of the purchase price,unless the contract says otherwise.

Question 23

Ms Sherbourne bought a candy bar costing 80 cents.She paid for it by presenting the storekeeper with a $2 coin.While this is not legal tender,it is so customary to give change that the storekeeper would have to warn customers if he was prepared to accept only legal tender.

Question 24

Guthrie Caterers failed to turn up as contracted to cater George and Susan's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.
This was an implied repudiation since Guthrie did not contact George and Susan and actually tell them,"We will not be catering your wedding."

Question 25

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.

Question 26

Gavin is in the business of local transport of goods,as well as running a rural bus service.He contracts for a delivery van from his local truck dealer,but before the dealer places the order with the manufacturer,Gavin amends the order to request the minibus model of the delivery van.Gavin and the dealer have created a new contract that replaces the prior one.

Question 27

Julian decides that he would like the house being built for him,under contract with Porter Developers,to have a blue tile roof instead of a red tile roof.The two kinds of tile are equally available and are the same price,and no roofing of the house has yet been done.Porter alleges that this is a material alteration of the terms of the contract,since the roof is one-tenth of the value of the house,and that,therefore,it cannot be done without Porter's agreement to the change,which it will give only for a further payment of $5,000.Porter is right.

Question 28

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 monetary amount that Barnum would be entitled to receive as compensation from Mario would be the amount of the loss that Mario could reasonably have foreseen at the time that the contract was entered into by the parties.

Question 29

Joe sold a barn full of hay to Jack but before Jack could transfer it to his own barn,a hurricane blew the roof off Joe's barn,and that part of the hay that did not blow away was ruined by the torrential rains.The contract is frustrated.

Question 30

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

Question 31

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's refusal to complete the agreement would entitle Doug to treat the contract as being at an end.He may therefore refuse to pay Doug for his work.

Question 32

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.

Question 33

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.

Question 34

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.

Question 35

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

Question 36

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.
Doug is entitled to ask the court for an order of specific performance of the contract.

Question 37

Cecilia agreed to buy an antique Japanese sword from Garfunkel.After the contract is formed but before Garfunkel 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.

Question 38

Guthrie Caterers failed to turn up as contracted to cater George and Susan's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.
There was an express repudiation of the contract when Guthrie failed to arrive when and where it should have.

Question 39

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 would not be entitled to claim payment,because he has not finished his part of the agreement.

Question 40

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.

Question 41

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery.
A condition may become a warranty ex post facto.

Question 42

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery.
Since this is a breach of a condition of the contract,Benny is released from any obligations he has under the contract,and the contract is at an end.

Question 43

In March,Kemal entered into an agreement with Bernadette whereby Kemal would rent Bernadette his cottage for one week in July.In May earlier that same year,Kemal negligently caused significant fire damage to the cottage while roasting marshmallows over a roaring fire in the cottage fireplace.As a result,the cottage was inhabitable for six months.Kemal can successfully assert that this agreement is frustrated.

Question 44

In the contract of sale of Cahalan's house to Greenwood,no particular method of payment was specified.Greenwood's lawyer has heard rumours that Cahalan got a much better offer after he signed the deal with Greenwood,and,from the attitude displayed by Cahalan recently,Greenwood's lawyer thinks Cahalan may be hoping the deal will fall through.Greenwood

A)should make sure he has a certified cheque for the full amount on the date of closing.
B)should make sure he has cash for the full amount on the date of closing.
C)should make sure that,if he has a personal cheque for the full amount,it is accompanied by a banker's letter guaranteeing the funds are there.
D)a,b,or c.
E)need not worry about how payment is made since,as long as it is the exact amount,Jones cannot legally refuse any mode of tender,provided that the contract did not stipulate a particular mode.

Question 45

Yongwei purchased an iPod on eBay.The iPod worked perfectly but the case was scratched.The eBay seller had stated that the iPod was in new condition.Yongwei will be successful in an action to a full refund on the basis of breach of condition.

Question 46

Fran's Flowers is required,as a condition of their contract,to supply the Ubiquitous Chip,a trendy restaurant,with 45 flower arrangements for tables and three large displays,twice a week.This week,it was two table arrangements short one day and three short on the other.
Fran's Flowers is entitled to be paid the amount of the contract less the value of the five table vases because there has been substantial performance of the contract.

Question 47

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery.
When faced with a seller's onerous exemption clause,it would be time well spent for an aggrieved purchaser to consider the effect of the law as it relates to fundamental breach.

Question 48

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery.
If Benny really wanted the pies,and felt that Marnie would be able to meet her commitments,he could choose to treat the breach of condition as if it were a breach of warranty.

Question 49

Mr.Wicks,a plumber,had a contract to repair a slow leak in a toilet in Dr.Bone's medical clinic.Because it had to be done when no patients were there,Mr.Wicks 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.Bone." Mr.Wicks did not turn up the next Saturday and,when Dr.Bone called to find out why,Mr.Wicks 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.

A)Dr.Bone breached the contract on the first Saturday.
B)Mr.Wicks breached the contract on the second Saturday.
C)Neither man has breached the contract;it is simply suspended.
D)The contract was not breached since it was frustrated on the first Saturday because Dr.Bone.could not be there.
E)a and b.

Question 50

Fran's Flowers is required,as a condition of their contract,to supply the Ubiquitous Chip,a trendy restaurant,with 45 flower arrangements for tables and three large displays,twice a week.This week,it was two table arrangements short one day and three short on the other.
Fran's Flowers is entitled to invoke the doctrine of quantum meruit and be paid for the value of what was delivered.

Question 51

Guthrie Caterers failed to turn up as contracted to cater George and Susan's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.
If,because they had received a week's notice,George and Susan were able to hire Cameron Caterers and that had cost $10,000 instead of the $7,000 that Guthrie would have charged,George and Susan would be able to get $10,000 damages from Guthrie.

Question 52

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.
Antoine is in breach of contract.

Question 53

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.
Should Antoine have failed to make arrangements for the extraction of the crew,he can successfully claim for half of his fee by virtue of the doctrine of substantial performance,and in fact his full performance of the first half of his obligation.

Question 54

Guthrie Caterers failed to turn up as contracted to cater George and Susan's wedding reception.The deposit,which was the only money paid to that point,was returned by courier the next morning without comment.
If Guthrie had called a week before the wedding,this would have been a breach de minimus of the contract.

Question 55

Fran's Flowers is required,as a condition of their contract,to supply the Ubiquitous Chip,a trendy restaurant,with 45 flower arrangements for tables and three large displays,twice a week.This week,it was two table arrangements short one day and three short on the other.
The Ubiquitous Chip can argue that Fran's Flowers has breached a condition of the contract and treat the contract as being at an end,which means the Ubiquitous Chip would not have to pay for the flowers delivered.

Question 56

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.

Question 57

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.
In any future dispute over the situation,Gamma's position will be that Antoine's actions constituted anticipatory breach.

Question 58

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.
If Gamma Oil arranges on its own for another helicopter to pick up the crew,it runs the risk of having to pay both the new pilot,and Antoine,should Antoine have made some alternative provision to honour his obligation to extract the crew.

Question 59

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery.
If Benny treated Marnie's failure to perform as a breach of warranty,the contract would not end but,to the extent that Marnie's breach had caused him injury,she would have to pay Benny damages.

Question 60

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.

A)If a court agrees that the Earles' behaviour rendered the performance of the contract impossible,King may be able to recover the difference between the salaries for the two jobs.
B)Since King was getting paid,it was irrelevant that he was not able to do the cataloguing and,when he quit,he breached the contract.
C)If the Earles can convince a court that King abandoned the contract,he will get nothing.
D)b and c.
E)None of these.

Question 61

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 10 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.

Question 62

In which of the following cases will a court order specific performance of the contract? i)Gigantic Electrical Warehouse repudiates its contract with Movie Co.to purchase 2,000 DVD players.The loss of this deal might push Movie into bankruptcy.
ii.Joan,a great opera singer,decides it is too far from New York to the National Arts Centre in Ottawa and so she will not perform at the sold-out concert there next week for which she had contracted months ago.
iii.Mitsuko had a contract with Refined Galleries to purchase a small Rembrandt drawing,which Refined now wants to sell to a regular and very wealthy customer.Refined will not give Mitsuko the drawing.
iv.John is refusing to perform a contract to sell his house to Eli.Eli has wanted to live in that house since he was a small boy.
v.Eli is refusing to perform a contract to purchase John's house.John has another purchaser but her highest offer is $10,000 less than Eli's.

A)All of these.
B)iii and iv.
C)i,iii,and iv.
D)i,iii,iv,and v.
E)i,ii,iii,and iv.

Question 63

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.

A)There is nothing Neat Things can since the contract is frustrated by the sinking of the ship.
B)Neat Things can sue Trendy because of its anticipatory breach on August 6.
C)There is nothing Neat Things can now do.It could have sued when the boat sank,if the delivery could not have been made on time even if the boat had not sunk,since the sinking of the boat would not then have been relevant to the breach of contract.
D)Trendy will lose if Neat Things sues now because,as of August 23,it is in breach of its contract with Neat Things.
E)Neat Things still retains the right to wait until September 15 and sue if Trendy does not perform its part of the contract.

Question 64

Dick agreed to paint Jane's house for $4,000,inside and out.Normally,it would have cost Jane $6,500 but Dick felt sorry for her because she was a single mother with four children and not much money,so he decided to give her a good deal.When Dick had painted everything except the kitchen ceiling,Arthur asked him to go on a fishing holiday,and Dick,who was rather irresponsible,decided he had had enough painting.He left a note for Jane saying "You've had more than your money's worth with what I've done already.I'll expect your cheque for $4,000 to be at my office when I return in two or three weeks." Which of the following statements is correct?

A)Dick is entitled to the full amount of $4,000 since,as he has in fact done at least $4,000 worth of work,he should get that on a quantum meruit basis.
B)Dick abandoned the contract before he had completed performance and is not entitled to any money since he has breached the contract.
C)Dick is entitled to $4,000,less what it costs Jane to finish having the kitchen ceiling painted,since he has substantially performed the contract.
D)The court will order specific performance of the contract and Dick will have to complete the painting for the agreed-upon $4,000.
E)None of these.

Question 65

For contracts concerning the purchase of land,once payment in full 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

A)bring an action for tender.
B)bring an action for termination.
C)bring an action for specific performance.
D)bring an action on the condition subsequent.
E)bring an action for delivery of legal tender.

Question 66

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

A)a force majeure clause.
B)an option to terminate.
C)a condition subsequent clause.
D)a frustration of contract clause.
E)an example of laches.

Question 67

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.
Based on the above scenario,which is most true?

A)Neat Things can sue Trendy immediately for breach of contract.
B)Neat Things can wait until September 15 and then sue Trendy for breach of contract.
C)Neat Things must wait until September 15 to sue Trendy for breach of contract.
D)a and b.
E)None of these.

Question 68

Carson,a fruit wholesaler,delivered bananas to Phil's Fruit Market.A sizable 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

A)merger.
B)waiver.
C)laches.
D)novation.
E)extinguishment.

Question 69

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."

A)Bacall can assert that this is a frustrated contract,and,since no work has been started,claim back the bid deposit of $50,000 and walk away from the whole thing.
B)Bacall is stuck with the contract and there is nothing she can do but take the loss.
C)Bacall can say that there has been a material alteration of the terms of the contract,and that this has discharged the contract's terms regarding payment,so she can renegotiate them without.losing the contract.
D)Because Bogart will be unjustly enriched if the contract is not renegotiated,Bacall can insist on a substitute agreement,which will discharge the old one.
E)a,c,or d.

Question 70

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?

Question 71

Morton,a famous entertainer,agreed to host a telethon for the Society of Feathered Friends at half his usual $50,000 fee.A week before the telethon,$25,000 was paid into his account.Morton had spent many hours working up jokes about the Society of Feathered Friends,since his normal materials were not really suitable for the expected audience.On the morning of the telethon he awoke with laryngitis and no voice,and the doctor says he cannot perform.

A)Describe how this will affect the contract between Morton and the Society of Feathered Friends.
B)If Morton had done some promotional ads for the telethon,would that change your answer to (A)?

Question 72

Paul ordered a motor bike from Moto-Haus.He had reviewed all the specifications and told the salesperson of his final choice.When the bike arrived,Paul found that it did not live up to the fuel efficiency that he expected or that was claimed in the brochure.He took the bike back to Moto-Haus,and demanded the return of his money,which was refused.Paul would be best advised to

A)treat the contract as at an end,and sue for breach of warranty.
B)treat the contract as at an end,and sue for breach of condition.
C)treat the contract as at an end,and sue for fundamental breach.
D)treat the contract as ongoing,and sue for breach of warranty.
E)treat the contract as ongoing,and sue for breach of condition.

Question 73

Petra agreed to purchase franchise rights from Valley Cream Inc.to sell its ice cream from small trucks in a large metropolitan area.Her deposit on the transaction was $15,000 against a final price of the rights at $40,000.The contract contained a term,of which Petra was aware,that the deposit would be forfeited as liquidated damages if she did not follow through on the deal.Early on in the process,Petra could not get the financing she needed,and was forced to back out.Valley Cream,whose file contained only the copy of the agreement,refused to return the money.The most important part of Petra's Statement of Claim will be that relating to

A)performance in equity.
B)the doctrine of part performance.
C)the duty to mitigate loss.
D)punitive damages for ordinary breach.
E)the doctrine of quantum meruit.

Question 74

In which of the following situations is it likely that the court will release a party from their contractual obligations:

A)Performance of the agreement was significantly more difficult than expected by one party
B)Performance of the agreement was significantly more expensive than expected by one party
C)A shortage of funds prevented one party from completing the obligation
D)Performance of the agreement was prevented after the destruction of the object of the agreement by a third party.
E)Performance of the agreement was impossible because the party's subsequent actions made it impossible for that party to perform the agreement.

Question 75

Mardo,a brilliant cloth designer,contracted to work for Texture,a textiles company that is world famous for its superb materials.A clause in the employment contract says Mardo will not work for anyone else but Texture for the five-year period of their contract.Shortly after starting to work for Texture,Mardo realizes she has always wanted to be a doctor and that,if she does not start soon,she will never achieve her goal.Texture refuses to let her out of the contract and points out that she has promised not to work for anyone else.Mardo leaves anyway.She then took a part-time job as a cocktail waitress.
Discuss whether Texture can get an injunction to stop Mardo working as a cocktail waitress while she puts herself through medical school.

Question 76

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

A)Catherine,as plaintiff,will succeed in arguing that the $10,000 deposit is a penalty.
B)Catherine,as defendant,will argue return of the $10,000 on the doctrine of part-performance.
C)The chain,as defendant,will argue that Catherine had a duty to mitigate her loss.
D)The chain,as plaintiff,will successfully argue that the $10,000 is liquidated damages.
E)Catherine,as plaintiff,will fail in arguing that the $10,000 is a penalty.

Question 77

Zelda contracts with Yvonne for a supply of specialized computer components worth $6,000,which she needs to meet a contract to supply Winnie with 60 laptop computers,a contract that is worth $65,000 to Zelda.Zelda makes it clear to Yvonne that her contract with Winnie is vital to let her get established in the market and that it is imperative that Yvonne meet the deadline."If you can't," she says,"I'll take the business to someone who can." Yvonne wants the business badly,so,against her better judgment,she agrees to a clause in the contract that says that,for every day delivery is late,she will pay Zelda $10,000.

A)This is a liquidated-damages clause and it will be enforceable against Yvonne.
B)Because liquidated-damages clauses are against public policy,Zelda will not be able to enforce this clause if Yvonne is late performing.
C)Although the court would not normally enforce this clause,since Yvonne was aware of the vital importance in this case of prompt delivery,the court will uphold the clause if she is late delivering.
D)This is a penalty clause and the court will refuse to enforce it.
E)Since Yvonne was under duress to sign this contract,the court will not enforce the clause,although under normal circumstances it would.

Question 78

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.

A)John should have looked for another job while he was fighting the case.
B)Since John could have been earning while he was waiting for the court's decision,the court will lower any damages awarded to him by an amount equal to that which he could have earned.
C)It is not up to the plaintiff to help the defendant avoid the consequences of its wrong actions,so the court will award him the full amount of damages he suffered.
D)a and b.
E)a and c.

Question 79

The contract between Bayson's Department Store and Clemson's Manufacturing contains a clause that allows either party to end the contract on 60 days' notice and the payment of liquidated damages,which are set at a reasonable amount.This clause is

A)a force majeure clause.
B)an option to terminate.
C)a condition subsequent clause.
D)a frustration of contract clause.
E)an example of laches.

Question 80

In the contract between Gamil's Building Materials store and Hightrees Logging and Lumber Company for the supply of lumber,there is a clause that allows either party to end the contract on 10 days' notice should actions of logging protesters on Hightrees property bring logging operations to a temporary halt.This clause is

A)a force majeure clause.
B)an option to terminate.
C)a condition subsequent clause.
D)a frustration of contract clause.
E)an example of laches.