Question 1

In all but one of the following situations,the contract is frustrated.Identify the exception.

Accepted Answer

A)  Wacky had contracted to supply a health-food store with jars of Melatonin, a hormone now thought to be a miracle potion. After the contract but before the delivery, the government banned the sale of Melatonin so that it could be properly tested under government auspices. 
B)  Craig, a trucker with whom you contracted last month to transport stoves tomorrow, phones to tell you that his truck has broken down. 
C)  Tracey contracted to sing at the your club on March 10, but that morning the club was destroyed by lightning. 
D)  On December 1, Pak contracted to buy Scott's horse. Delivery day was set for December 10. On December 8, the horse contracted rabies and had to be destroyed. 
E)  You agree to paint Joe's house on the following Tuesday, and on the Monday before, through no fault of either party, it is destroyed by fire.

Question 2

Explain how a contract can be discharged by agreement.

Accepted Answer

The answer of Explain how a contract can be discharged...

Question 3

The Frustrated Contracts Act today requires that when a deposit is paid,the costs incurred can be split out of the deposit.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  A contract can be ended by breach only if there was a breach of condition, not a breach of warranty. 
B)  A person has not legally tendered performance if he pays a $500 debt in 25-cent coins. 
C)  If a person properly tenders performance of a service that is rejected by the other party, he is not required to try again. 
D)  A contract ends by agreement when the parties include in the contract a "condition subsequent"-i.e., a clause that says the contract will end upon the happening of a specified future event that then takes place. 
E)  If one party to the contract has paid for a service, but now the other doesn't want to perform, the contract is ended by agreement as long as they both agree to call it off.

Question 5

If a contract states that the contract is "subject to the purchaser obtaining financing for $10 000 at 8 percent by 5:00 p.m.Friday,March 11," it means that

Accepted Answer

A)  if the purchaser does not obtain the financing, he is in breach of contract. 
B)  if the purchaser does not obtain the financing, the contract is frustrated. 
C)  if the purchaser does obtain the financing and properly notifies the seller, the contract is then in full force and effect. 
D)  there is a contract whether the purchaser gets the financing or not, because the statement is just a statement of intention and doesn't affect the contract. 
E)  the obtaining of financing is a condition subsequent and ends the contract.

Question 6

Explain the principle of mitigation in contract law.

Accepted Answer

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Question 7

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?

Accepted Answer

A)  The most likely remedy would be for the court to award specific performance to make her do the job. 
B)  Harvey must wait until Christmas to see if Cleo actually performs before he can take legal action. 
C)  Cleo has repudiated the contract and Harvey can take legal action immediately. 
D)  Their contract has been frustrated by circumstances outside their original contemplation, and thus they are excused from their previous obligations. 
E)  Cleo could claim quantum meruit for any work she had done so far and that would be the end of the matter.

Question 8

Explain under what circumstances a creditor would be entitled to refuse to accept payment proffered to him,on or before the payment due date.

Accepted Answer

The answer of Explain under what circumstances a creditor would...

Question 9

What is the importance of the distinction between a breach of warranty and a breach of condition?

Accepted Answer

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Question 10

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.

Accepted Answer

The answer of Joe owed Harry $500,but Harry was confused...

Question 11

Where a contract is discharged or modified by what amounts to a unilateral discharge,explain the problem that arises and its solution.

Accepted Answer

The answer of Where a contract is discharged or modified...

Question 12

Will anything short of the complete performance of the contractual terms amount to performance of the contract and discharge the agreement?

Accepted Answer

The answer of Will anything short of the complete performance...

Question 13

What is an anticipatory breach?

Accepted Answer

The answer of What is an anticipatory breach?...

Question 14

Explain what restrictions are put on the effect of exemption clauses (sometimes referred to as exclusion or exculpatory clauses)in a contract.

Accepted Answer

The answer of Explain what restrictions are put on the...

Question 15

Indicate the various ways that the contractual relationship can come to an end.

Accepted Answer

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Question 16

Which of the following is one of the remedies generally available for a breach of contract?

Accepted Answer

A)  repudiation 
B)  specific performance 
C)  punitive damages 
D)  anticipatory breach 
E)  novation

Question 17

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?

Accepted Answer

A)  specific performance 
B)  damages 
C)  injunction 
D)  no remedy 
E)  rescission

Question 18

Which of the following is false with regard to ending a contract by agreement?

Accepted Answer

A)  A contract can be ended by the happening of a "condition subsequent" provided for in the contract. 
B)  A contract can be ended by one party if he finds a better deal-e.g., by cancelling an order that has been accepted, as long as this is done before performance. 
C)  A contract can be ended by agreement if neither party to the contract has performed his or her obligation. 
D)  A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. 
E)  A contract can be ended by agreement by "mutual release."

Question 19

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause when the buyer suffers a loss?

Accepted Answer

A)  A consumer transaction is involved and provincial legislation prohibits such exemption clauses in consumer transactions. 
B)  The buyer of an expensive computer software program received, a month after the sale, an invoice on which was printed an exemption clause that he hadn't been shown before. 
C)  The store had posted at the entrance to the dressing rooms a large sign reading "Not responsible for stolen articles," and the customer lost a briefcase in a fire that swept through the dressing rooms. 
D)  There has been a breach of the fundamental obligation of the contract, and the court holds that on its true construction the parties did not mean it to cover a serious breach. 
E)  Ralph bought a used lawnmower under a written and signed contract that contained an "as is" clause.

Question 20

Rahilly entered into a contract with Khan,whereby Rahilly agreed to paint a portrait of Khan's wife to be completed by her 30th birthday,six months from the time of this agreement.Three months before the portrait was to be completed,Rahilly told Khan that he would not be doing the portrait because he accepted a job in Boston and was leaving immediately.Which of the following is false with regard to the rights of the parties in this situation?

Accepted Answer

A)  The contract has not been frustrated because there was no unforeseen event beyond the control of either party making it impossible or meaningless to perform the contract. 
B)  The contract has been repudiated, and Khan can elect to acknowledge the breach and sue Rahilly right away. 
C)  Khan must wait to see if Rahilly really fails to perform the contract before Khan can sue. 
D)  If Khan presses Rahilly to perform according to the contract, it is possible that the contract could be ended by frustration. 
E)  If Khan presses Rahilly to perform according to the contract, it is possible that the contract could be ended by performance.

Exam 9: The End of the Contractual Relationship